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ineligible 403b rollover


Guest confused911

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Guest confused911

Hi, I posted this on 403bwise message boards, and someone suggested I post it here as well...

Hi, I work for a financial planner who started his own company last year. I was not with him prior to that when he worked at a large securities firm. It has come to my attention that he rolled a TSA into a traditional IRA in 2001 for one of our current clients. The problems are these:

*she was ineligible for a rollover (no seperation from service, did not change employers, not 59 1/2, no disability, and obiously, no death).

*Her employer continued to make pre-tax contributions to this new account until we had them stopped earlier this year, once I realized what happened.

*it is not very easy to bring this up to my boss.

What I need to know is-what exactly are the tax consequences for this client?

If I approach a mutual fund company now to establish a new 403b, would they possibly reverse the old transfer?

She turns 59 1/2 in February 2004, and will still be working. Can her pre-tax contributions be made then directly to an IRA?

Any help would be greatly appreciated. We are supposed to have the client in next week, and I have no idea what to tell her.

Thank you!

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