Can a plan sponsor initiate a 90-24 transfer?

[Übernerd]

Employer is going out of business--not because of bankruptcy, but because it's the "stump" of a much larger entity, most of which was sold. Employer is "whatever was left" after the sale, including several large benefit plans. Several of Employ'ers subsidiaries (the "Subs") will continue as independent entities after Employer fades away. Employer's 403(b) plan is saddled with numerous TDAs from previous incarnations, with account balances for (1) its own active employees, (2) the Subs' employees, and (3) inactive employees who went with the assets that have been sold.

Employer needs to terminate its plans before it ceases to exist. It will spin off to new plans sponsored by the Subs the assets in the 403(b) plan attributable to the Subs' employees. It can deal with its own employees directly. But it's stuck with the inactives. One idea that's been floated is to "force" the money out of the plan through an employer-initiated 90-24 transfer to some acceptable vehicle. I haven't been able to find any discussion of such a transfer (presumably because RR 90-24 is only concerned with employee-initiated transfers). (I do know that the proposed regs, once finalized, would not permit such a transfer because it would not be made to a plan of the participants' current employer.)

Anybody heard of such an animal?

Thanks.

[Guest mjb]

if the benfits are held in an annuity contract there is no need to transfer funds since the ee will own the contracts used to fund the benefits provided by the ins. co. If the 403b is funded through a mutual fund you need to review the agreement with the MF custodian to determine the proper disposition of assets.

[Übernerd]

if the benfits are held in an annuity contract there is no need to transfer funds since the ee will own the contracts used to fund the benefits provided by the ins. co. If the 403b is funded through a mutual fund you need to review the agreement with the MF custodian to determine the proper disposition of assets.

The assets are held in annuity contracts, but they are group (rather than individual) contracts.

[Guest mjb]

The employees must each have a certificate of insurablity from the ins co that will identify their ownership interest in the gp. annuity, i.e., vested benefit. State ins laws require that a certificate be issued to each participant. Read the gp annuity contract.