TSA to TSA transfer refused by Fund Sponsor

[Guest ripet503]

I started participation in a 403(B) plan in 1976. I no longer work for that employer, or for an employer eligible for a 403(B) plan. I recently tried to transfer my account to a custodian to continue to administer my investments in a different group of Mutual Funds. The carrier, TIAA/CREF has refused to release the funds for transfer, stating the plan does not allow it. I am fully vested in all of the account value. I am 52 years old, and not eligible for distribution until 55. Can TIAA/CREF hold my account hostage in this way?

[Kathy]

Good question! Do you know if your plan is covered by ERISA? Did you receive any type of paperwork when you began participating? Did the employer also contribute to the plan?

I would read all of the paperwork you have very carefully and then ask TIAA-CREF for more information. I belive that under 90-24 (Rev Rule???) you may transfer your 403(B) assets to another Custodian who accepts the transfer into a 403(B) with similar withdrawal restrictions.

You indicate that you have terminated service with the eligible employer. This should be a distributable event meaning that you could take a distribution from the 403(B) and roll it into an IRA - you may lose certain benefits such as the ability to postpone certain required minimum distributions until age 75 - but it might be worth it anyway to get better investment results and have more control. You need to speak with an accountant who knows this area very well.

Also, if you do the rollover, you'll want to do it by way of a "Direct Rollover" in order to avoid the 20% mandatory withholding on a distribution from a 403(B). Make sure you read the distribution paperwork very carefully and work with an accountant or finacial advisor who can help to make sure the Direct Rollover is done properly to avoid tax consequences.

Good luck!

[This message has been edited by Kathy (edited 06-03-99).]

[jlf]

What are the plan's distribution options? The plan may not allow transfers/rollovers. They may require you to annuitize; especially if the employer contributed to the plan.

Kathy is assuming that your plan is funded solely by your salary reductions. This is probably not the case.

[This message has been edited by jlf (edited 06-03-99).]