Change in Recordkeeper & 90-24 Asset Transfer

[Guest T-BONE]

Tax-exempt employer sponsors 403(B) plan, and decides to change recordkeepers. New recordkeeper is mutual fund company, and employer would like to give participants the option to transfer their investments from annuity contracts to mutual funds.

Can a participant change his or her underlying investment from annuity contract to mutual funds? Is this accomplished through a so-called 90-24 asset transfer? What documentation would be necessary to accomplish the exchange? I know that participants should proceed with caution before making an exchange since most annuity investments contain stiff penalties for early withdrawals. Any other issues?