ERISA 403b to 401k

[Spencer]

Prospect who currently has an ERISA 403b and they want to change to a 401k. When/if they terminate the 403b, do they have to allow participants the option to take a lump sum distribution? They want everyone to rollover to the new 401k.

Thanks!

[ETA Consulting LLC]

They would have to distribute everyone within 12 months of termination, and allow each individual to direct their distribution. They cannot force anyone to roll over directly into the 401(k).

Good Luck!

[QDROphile]

If the 403(b) plan is terminated, the participants cannot be required to roll over distributions to the 401(k) plan.

A rollover is not a distribution option. A direct rollover is an option for what a participant can do with an eligible rollover distribution.

If participants have only annuity payment options under the 403(b) plan, no direct rollover will be possible because annuity payments are not eligible rollover distributions. Offering a lump sum distribution option will provide a participant with the opportunity to elect a direct rollover to the 401(k) plan.