Pre/Post 89 403b contributions/distributions

[Guest Brad Larsen]

What are the distribution rules for a 403b plan with pre and post 1989 contributions in a comingled account?

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Bradlarsen@Adelphia.net

[M R Bernardin]

As I recall, if you track those amounts separately, deferrals made before 1989 which are invested in an annuity contract (as opposed to a 403(B)(7) custodial account) can be distributed at any time, rather than only upon attainment of age 59-1/2, separation from service, etc. Amounts invested in a 403(B)(7) custodial account are subject to the above rules, regardless of when made. And non-salary-reduction contributions invested in an annuity contract are arguably not subject to any of the distribution rules, regardless of when made.

[jlf]

Check out FRANK V. AARONSON, ET.AL; COURT OF APPEALS FOR THE SECOND CIRCUIT. 96-9456. In light of the fact that 403(B)8 governs rollover amounts,and the restrictions under 403(B)8 were repealed; was the Court wrong in ruling that a post 1989 amount is only eligible for rollover treatment after one of the early distribution triggering events of section 403(11) is satisfied?

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[This message has been edited by jlf (edited 05-04-99).]