457

[Guest thestockman]

Guys,

Although we all seem to be aware now that 457's can be run out into an IRA starting the first of the year, does anyone know about the circumstances of the roll?

i.e - most people at retirement have a lump sum option to a degree. However, I am unaware if a person is already retired or considering retiring under the new law, will they havea lump sum option, and to further the question - will tehy face tax consequences on rolling the plan to the IRA?

I look forward to insight - thanks, I'm a new user who has found reading from this site quite profound.

[jlf]

Provided a 457 plan retiree has not elected a life annuity, his/her 457 balance may be rolled over to an IRA, effective 1/1/02, at any time during retirement.

Best wishes,

Joel L. Frank

[Guest thestockman]

Considering that the opportunity to roll the entire balance to an IRA has never been a choice without suffering tax wise very badly, have you heard that there might be a window of opportunity for prior decisions that were chosen in conjuntion with the 457 and the new choices?

[jlf]

Dear Stockman:

Rollovers will first will be permitted for years after December 31, 2001.

Would you please re-phrase your question. I am having difficulty ascertaining just what it is you would like us to clarify. Pleas be specific.

Best wishes,

Joel L. Frank

[Guest thestockman]

I am a Fiancial Advisor that works with rollovers and retiring folks. However, with 457's I have always had to avoid them because most have always chosen the life annuity ( monthly payment ), and there has never been a rollover, because rollovers from the 457 were never a qualified event.

Previously you told me that rollovers will be permitted if a person has not chosen a life annuity. I understand that.

I would like to know if there has been any answers as to whether people that are already retired from their 457, and are currently taking their life annuity ( monthly check ), will they now have a window of opportunity to reverse their previous election, and take a lump sum?

Why? Because now it would be a rollover of a qualified to a qualified and if they have the option of taking a lump sum vs,. the lifetime annuity, then there is greater funds for myself in doing the rollover, do you follow me?

I'm sorry if I'm perhaps not phrasing this correctly. If need be please just give me a call. 1-800-628-5770

Shawn

[Carol V. Calhoun]

That is a good question. We've had some discussions in my office about it. The issue is that all elections on termination of employment in the past under 457 plans have been irrevocable. The question is whether their prior irrevocable elections have now become revocable, or whether the new rules apply only to new elections.

Although the statute is not entirely clear, it appears to us that after the effective date of EGATRRA, an employer could amend the plan and allow an employee to revoke the old election and make a new one. However, the employer is under no obligation to do so. Thus, a lot depends on what employers decide to do.