403b restate into a 401k

[Guest jessicahartle]

Is it possible to restate a 403b into a 401k? I have an employer who set up a 403b not knowing they had to be in custodial accounts and for Oppenheimer to be the custodian. Oppenheimer wants to charge them $750 a year to provide custodial services. The employer decided they wanted to have a 401(k) so they can have an inside trustee and not have to pay Oppenheimer for this service.

Do they have any options?

[GBurns]

Aren't there going to be possibly even greater charges from the various service providers needed for a 401(k)?

I am sure that the Adminstrator and/or recordkeeper, and the investment providers will all have charges. Who will do the testing and reporting etc and How much will those charges be?

[Guest jessicahartle]

There will be no more charges than normal. This was an ERISA qualified 403(b), so the reporting was all the same. As a TPA, we charge the same fees for a 403(b) as we do for a 401(k).

[GBurns]

What si normal for a 403(b) should not be normal for a 401(k).

Are you also providing the investment vehicles?

Are you saying that neither the 403(b) nor the 401(k) investments have any sales charges or account fees?

[mbozek]

403(b) plans have many advantages over a 401k plan including simplifed 5500 filing (only answering Q 1-5, & 8) no irs determination letter or ADP testing. I dont understand how reporting can be the same for a 403(b) plans and 401k plans.

Under current law 403(b) assets cannot be transferred to a 401k plan nor can a 403b be restated into a 40lk plan because a 403(b) plan is not a qualfie dplan.