Anyone believe that Congress intended to repeal rollover distribution

[jlf]

The use of the early distribution events of sections 403(B)(7)(A)(ii) and 403(b)11 to also govern eligibility for rollover treatment renders the triggering events under section 403(B)8, the rollover provision of section 403(B), which were repealed under the Unemployment Compensation Amendments of 1992, meaningless.

Moreover, insofar as 403(b)11 went into effect on January 1, 1989 the application of section 403(b)11 to rollovers has the result of bifurcating the employee's account balance between pre-1989 and post 1988 amounts with reference to their eligibility for rollover treatment.

Example:

Assume a 12/31/00 balance of $500,000.00 with a balance of $200,000.00 on 12/31/88. The employee is free to rollover only $200,000 at will because the triggering events under section 403(B)8, the rollover provision, were eliminated. The employee may only rollover the post 1988 balance of $300,000.00 upon satisfying one of the early distribution events under section 403(b)11 because section 403(b)11 went into effect on 1/1/89.

Congress never intended that a bifurcation would be the result of its repeal of the distribution events under section 403(B)8, the rollover provision of section 403(B). Is there anyone out there that believes that Congress wanted to repeal rollover distribution events for just pre 1989 amounts? Apparently the United States Court of Appeals for the 2nd Circuit does. See FRANK V. ARRONSON at: http://laws.findlaw.com/2nd/969456.html.

I call on all the pros in the 403(B) community to request a Congressional clarification on this issue.

Joel L. Frank

[jlf]

Some of you may want to see the Court's reasoning in FRANK v. AARONSON. You can read the entire opinion at: http://laws.findlaw.com/2nd/969456.html