403(b) rollover options - triggerable event occurred 3 YEARS ago

[Guest nyoung314]

Hello everyone,

I have searched the boards but could not find an exact answer so I am posting.

My mom has a 403(b) plan from her former employer of 20 years, a non-profit hospital. She quit that job either at the end of 1999 or beginning of 2000, and has been working for a private lab since August 2000. I believe she has a 401(k) with the new employer.

Can she rollover her 403(b) plan into a new 403(b) plan with a different provider, or to an IRA? Is there a penalty associated? Has she waited too long? By the way she will be 50 years old in July and she lives in Tennessee. My dad is a schoolteacher/coach who has taught for 31 years and is retiring in May - he is 53.

From what I tried to decipher of the IRC Sec. 403 (I'm graduating in May with my Bachelor's in Finance so this is fairly new to me), she should be able to rollover at any age to another 403(b) without penalty of any kind. But the real question is could she rollover into a 401(k) or an IRA and what would the associated penalties be (and would she want to?).

Most importantly, she did have a qualifying triggerable event (severance from employment), but that was in 1999/2000 and this is 2004 so does that matter?

Thank you in advance for your assistance, it is greatly appreciated.

Yours,

Nicholas Young

ps I can't add, the triggerable event would have been 4 years ago even though my title says 3 yrs.

[Michael Devault]

There is no time limit for making a rollover after the triggering event occurs. Thus, since she has already severed employment with the employer sponsoring the 403(b), distributions can be made and rolled.

The distribution may be rolled into an IRA and, if her current employer's 401(k) plan so permits, she can roll the distribution into that 401(k) plan.

Hope this is of benefit to you. Best wishes.

[Guest richardl]

I believe Michael is right on target. If you need a source document to make you feel comfortable please let me know.