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There is a bill in Congress to make 457 Plans portable.


Guest John Magwood

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Guest John Magwood

I am separating from service from a Massachusetts college which has a 457 Plan. I've heard that there is a bill in Congress to make 457 plans portable to 403b Plans. Does anyone know if this is going to pass?

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John, there are pension portability provisions in the bill the House passed last week that increases IRA contribution limits. It's the Conprehensive Retirement Security & Pension Reform Bill.

It passed the House by an overwhelming 401-25 vote. It will likely be passed by the Senate, as well. However, the President has expressed concern about the fiscal irresponsibility of the bill, but hasn't said outright that he will veto it. If it passes the Senate by the same margin as the House, he'll have a tough time with a veto, since it can be over ruled.

It's an election year and fun to watch these things. If I were a betting man, I would say there's a good chance of passage. But, I don't ever win any money in Las Vegas.

Hope this is of some help.

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  • 1 month later...

Just a brief update - H.R. 1102 was quickly approved by the Senate Finance Committee on September 7, and is anticipated to go to the Senate floor before the end of September. It contains pension portability among many other pension measures. Like Michael, I don't predict legislation passage in an election year (Vegas, eh, Mike?), but possibilities look better for this bill than others introduced in the last 2-3 years.

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The Senate version passed the Finance Committee unanimously last Thursday and is scheduled for the Senate floor on September 22 (at last report). The portability provisions are not controversial. While there is decent bipartisan (whatever that means these days!) support in both chambers, the Senate version has some language to address the cash balance controversy and includes some provisions targeted at retirement savings for lower and middle class workers/families. On Friday, Sen. Harkin issued a press release indicating his intention to offer an amendment to redress the cash balance controversy, and the administration feels the bill doesn't go far enough on some issues but stopped short of saying the president would veto. Check the older Benefits Buzz for news/analysis/text of last week's happenings!

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The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances.

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