403(b) Rollovers

[Guest Thornton]

Can a distrbution from a 403(B) plan be rolled into a 401(k) plan? I don't think so, but can't locate authority. Thanks.

[MWeddell]

No, it can't be rolled over into a 401(k) plan, although Congress is thinking about changing it.

The best cite I can give is Code Section 403(B)(8)(A) which basically says that the distribution from a 403(B) contract won't be taxable if it's rolled over into another 403(B) contract ("an annuity contract described in paragraph (1)" literally) or an IRA. Also, it won't fit the definition of a rollover in 415© so that it'll be subject to 415 limits when it comes into the 401(k) plan, if the plan even allows lump-sum after-tax contributions.

[Guest Donald]

Is it possible to roll a 403b into an IRA upon retirement?

[MWeddell]

Yes, a distribution from a 403(B) contract may be rolled into an IRA.

[Guest Robert Collins]

Below are excerpts from two regs, one on qualified plans and one on 403(b)plans.

1. Qualified Plan rollover:

Reg 1.402©-2. Eligible rollover distributions; questions and answers.

Q-2: What is an eligible retirement plan and a qualified plan?

A-2: An eligible retirement plan, under section 402©(8)(B), means a qualified plan or an individual retirement plan. For purposes of section 402© and this section, a qualified plan is an employees' trust described in section 401(a) which is exempt from tax under section 501(a) or an annuity plan described in section 403(a). An individual retirement plan is an individual retirement account described in section 408(a) or an individual retirement annuity (other than an endowment contract) described in section 408(B).

2. 403(B) Rollovers:

§1.403(B)-2. Eligible rollover distributions; questions and answers.

Q-1: What is the rule regarding distributions that may be rolled over to an eligible retirement plan from annuities, custodial accounts, and retirement income accounts described in section 403(B)?

A-1: Under section 403(B)(8), as amended by UCA, any eligible rollover distribution from a section 403(B) annuity is permitted to be rolled over to an eligible retirement plan. For purposes of this section, a section 403(B) annuity includes an annuity contract, a custodial account, and a retirement income account described in section 403(B). For purposes of section 403(B)(8) and this section, an eligible retirement plan means another section 403(B) annuity or an individual retirement plan (as defined in §1.402©-2), Q&A-2 but does not include a qualified plan (as defined in §1.402©-2), Q&A-2 . . .

[jlf]

Take a look at 403(B) message board. Then go to topic "rollover transactions" dated 10-30-98.

Also go to "Retirement Plans in General" Message Board. Topic: "What qualifies a distribution for rollover treatment"

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