Jump to content

403b plan termination


Guest Mike Moore
 Share

Recommended Posts

Guest Mike Moore

I need info on how to terminate a 403b and move it over to a 457 plan. I have a copy of Rev Proc 2001-17. I could use some help in gleaning what I actually need to submit for correction. The problem is that the 403b is with a city which is an ineligible employer. Thanks.

Link to comment
Share on other sites

I responded to your post on another board, without realizing that the 403(B) plan was with an ineligible employer. In that case, it would not be a 403(B) plan at all. However, you would need to look at applicable state and local law to determine what the employer's obligations might be under it. For example, annuity contracts under a 403(B) plan must be owned by the employee. If this was done, the employer may not have the ability to take the annuities back, even if they do not constitute 403(B) annuities for tax purposes. Moreover, even if the employees do not have the right to keep the existing annuities or custodial accounts, the employer would probably not be able to move the existing 403(B) money to a 457(B), because a transfer from a nonqualified annuity to a 457(B) plan is treated as if it were a new contribution, subject to the normal limits under section 457. Thus, any transfer of more than $11,000 for any employee not subject to a catch-up provision would be impermissible.

Employee benefits legal resource site

The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...