ERISA 403(b) and custodial account

[Guest philc]

If an ERISA 403(b) plan, funded through custodial account, terminates, can the employees take a distribution of the employer contributions as a result of the plan termination and roll over if they choose?

403(b)(11) doesn't allow distribuitions of "salary reduction amounts" as a result of plan termination from annuity contracts. Distribution of employer contributions as a result of plan termination if held in an annuity contract would be permitted.

403(b(7)(A) indicates no "amounts paid by the employer" under the custodial account may be distributed unless 59 1/2, death, disability, severance, hardship (salary reduction amounts).

Does this mean no employer contributions under a custodial account may be distributed due to plan termination? If so, why the difference?

[k man]

i am trying to resolve a similar question. i believe the code is clear and that you are correct. however, i would like to know whether the employer has to continue filing 5500's.