403(b) termination with annuity contracts

[Flyboyjohn]

I think there's a way now to terminate am ERISA 403(b) plan invested in individual annuity contracts (something about assigning the contracts to the participants).

Questions:

1. Does the vendor/insured have to "agree" with the assignment or can the employer make the assignment unilaterally (just send the vendor the assignment and file a final 5500 showing all assets distributed)?

2. Anybody had any experience they're willing to share on doing this with TIAA-CREF?

Thanks

[Peter Gulia]

If the annuity contracts really are individual annuity contracts, how would such a contract's holder - each individual participant - assign to himself or herself a set of contract rights that the individual already holds?

[Flyboyjohn]

Sorry, I'm positing an assignment by the employer to the participant along these lines:

"We as employer/plan sponsor don't think we have anything to do with this contract other than the fact that our government says we have to consider it as an asset of an employee benefit plan for reporting and disclosure purposes. Accordingly we are assigning any and all rights we may have over this contract to the insured individual and hereby disclaim any responsibility we may have had or been implied to have in the past.

PS to policy vendor: please adjust your records to reflect this policy as having no further association with the XYZ 403(b) Plan. All future communications on this policy should be directed to the insured."

[AMDG]

It is my understanding that TIAA-CREF does indeed issue "fully paid-up annuity contracts" to individuals.

As a practical matter, it is also my understanding that some recipients do not understand the situation and continue to contact the employer's HR office regarding their 403(b) accounts after the fully paid-up annuity contracts are distributed to them.