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waid10

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  1. Hi. We have an employee that participated in our 457(b) Plan. She terminated employment in June of 2009. Upon her termination, she completed the form to defer distribution commencement until a later date. She selected the maximum deferral, choosing to receive her account at age 70 1/2. She now comes to us and wishes to receive distribution of her account sooner (actually, I believe she wants to start distribution now). She is age 62. Am I correct in my reading of Treas. Reg. 1.457-7©(2)(iii) that the law permits a change to a distribution election ONLY if the change pushes the distribution date further into the future and that a change accelerating the distribution date is not permitted? Thanks for any help.
  2. Does anyone know where to find a list or article that lays out the required amendments over the last several years for a 457(b) governmental plan? I have recently been handed a plan that hasn't been touched since 2002 and I want to make sure to update it for all required legislation. Thanks.
  3. There is a match and the employer does have a plan document. The new vendor has a prototype plan that the employer will adopt as a restatement of the plan. So I guess, there is not termination, and consequently no distributable event. The restated plan does not permit transfers.
  4. I don't think I gave enough information. The new vendor has supplied their prototype plan. They are claiming that it is a restatement of our prior plan. However, it seems to me that adopting their prototype plan is a termination of the prior plan. Does it turn on whether the prototype has essentially the same terms as the prior plan? I guess the answer comes down to whether the adoption of the new vendor's prototype is a termination of the prior plan or a mere restatement. If it is a termination, then participant's can roll their money wherever. If it is merely a restatement (and a change of vendor), then participants have to leave their money with the prior vendor or move it to the new vendor. Do you agree?
  5. My employer is currently changing vendors for our 403(b) Plan. The new vendor is putting in its own plan, as a restatement. Our HR department is getting flooded with calls from financial planners saying that, in essence, the employer is terminating the old plan. They claim that this is a distributable event, and that their clients (some of our employees) have the right to roll their balances to wherever they choose. This doesn't seem right to me. I was under the impression that this is not a distributable event. The employees have two choices: (1) leave their account balances with the old vendor until a distributable event does occur (e.g., reach normal retirement age); or (2) move their balance to the new vendor (is this a 90-24 transfer?) Am I correct on this? In addition, the old vendor is saying that the participants can roll their balances into a new product of the old vendor. Again, I didn't think rollovers of any type were permitted. I thought that participants had to leave their balances where they are, or transfer to the new vendor. Any thoughts? Thanks.
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