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403(b) assets--is a trust agreement OK?


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In general, they must be held in an annuity or custodial account. This requirement comes from section 403(B) itself. The beginning language refers only to an annuity. Section 403(B)(7) provides that a custodial account will be treated as if it were an annuity under certain circumstances.

The one exception is that at one point, the IRS apparently permitted certain state qualified plans to also incorporate 403(B) features, even though the statute did not provide for this. This is no longer permitted, but there were a few plans grandfathered when IRS made the change.

Employee benefits legal resource site

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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