403(b)(7) Withdrawals

[oldman]

We have a 403(b)(7) plan that wishes to allow participants to withdrawal rollover contributions at any time. §403(b)(7)(A)(ii) provides "under the custodial account no such amount may be paid or made available to any distributee before the employee dies, attains age 59-1/2, has a severance from employment, becomes disabled (within the meaning of section 72(m)(7)), or in the case of contributions made pursuant to a salary reduction agreement (within the meaning of section 3121(a)(5)(D)), encounters financial hardship."

Would you agree that under a 403(b)(7) plan, rollover withdrawals could not be permitted at any time?

[ETA Consulting LLC]

What does the plan's document state? Does it state you may not roll over any amount into a vendor's account unless the vendor (or TPA) agrees to separately account for that amount.

Always! Always! Read your plan!

We can all provide hundreds (even thousands) of possibilities; but reading the language in the plan (and determining how the plan's language and the contract language differs; while remaining open to the possibiliity that someone's just making stuff up).

Good Luck!

[Belgarath]

Oldman - take a look at 1.403(b)-6(i). But first, check the plan document as ERISAtoolkit advised.

[mbozek]

FWIW, Sungard's 403b plan allows withdrawals of rollovers at any time, no restrictions.

Austin: Sorry I inadvertently deleted your message by mistake.

IRC 403b7Aii: no such amounts may be paid or made available to any distributee before employee, dies attains 59 1/2, has a severance from employment, becomes disabled or encounters financial hardship. Only exception is 72t distributions.

How about providing the language from the sungard document.

You are quoting the provision on custodial accounts aren't you?

[austin3515]

From Sungard's 403b (part of the basic plan document, there is no mention of ISD's for rollovers in the AA):

(5) Rollover Contributions; Employee Contributions. A Participant may elect to receive an in-service distribution of his/her Accounts attributable to Rollover Contributions and Employee Contributions subject to Sections 6.01(D)(2) and (3), except as the Employer provides otherwise in an Addendum. Distribution of a Rollover Contribution or Employee Contribution is subject to Section 6.04 if Section 6.04 otherwise applies to the Participant.

6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND TO SURVIVING SPOUSES.

Which doesn't apply to this conversaiotn.

[austin3515]

Oldman - take a look at 1.403(b)-6(i). But first, check

the plan document as ERISAtoolkit advised.

1.403(b)-6(i)

(i) Certain limitations do not apply to rollover contributions. The limitations on distributions in paragraphs (b) through (d) of this section do not apply to amounts held in a separate account for eligible rollover distributions as described in § 1.403(b)-1 0(d).

[mbozek]

From Sungard's 403b (part of the basic plan document, there is no mention of ISD's for rollovers in the AA):

(5) Rollover Contributions; Employee Contributions. A Participant may elect to receive an in-service distribution of his/her Accounts attributable to Rollover Contributions and Employee Contributions subject to Sections 6.01(D)(2) and (3), except as the Employer provides otherwise in an Addendum. Distribution of a Rollover Contribution or Employee Contribution is subject to Section 6.04 if Section 6.04 otherwise applies to the Participant.

6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND TO SURVIVING SPOUSES.

Which doesn't apply to this conversaiotn.

The two provisions in question are subject to exceptions from the rules for 401k/403b plan distributions.

An amount rolled over from another plan can be distributred before 59 1/2.

Employee contributions usually refer to after tax amounts voluntarily contributed by employees to a PS type plan which as I recollect could be distributed prior to 59 1/2. Neither of these two contributions are subject to the restictions on distributions to pre tax contributions made under 401(k) or 403(b)(7).