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Non Governmental 457 Distibution

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I am getting conflicting information in regards to a Non Governmental 457 plan for a distribution.

 

Can the participant take a distribution (he's quitting) from the 457 plan and roll it over into an IRA or SEP IRA?

 

Some retirement specialists are saying no problem and others say no way. Please help. Plus if you can reference any website that verifies your answer, that would be much appreciated. Thanks.

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I am getting conflicting information in regards to a Non Governmental 457 plan for a distribution.

 

Can the participant take a distribution (he's quitting) from the 457 plan and roll it over into an IRA or SEP IRA?

 

Some retirement specialists are saying no problem and others say no way. Please help. Plus if you can reference any website that verifies your answer, that would be much appreciated. Thanks.

 

 

I am getting conflicting information in regards to a Non Governmental 457 plan for a distribution.

 

Can the participant take a distribution (he's quitting) from the 457 plan and roll it over into an IRA or SEP IRA?

 

Some retirement specialists are saying no problem and others say no way. Please help. Plus if you can reference any website that verifies your answer, that would be much appreciated. Thanks.

 

No. There is a special for for governmental plans. "1.457-7(b)(2) Rollovers to individual retirement arrangements and other eligible retirement plans. A trustee-to-trustee transfer in accordance with section 401(a)(31) (generally referred to as a direct rollover) from an eligible government plan is not includible in gross income of a participant or beneficiary in the year transferred. In addition, any payment made from an eligible government plan in the form of an eligible rollover distribution (as defined in section 402©(4)) is not includible in gross income in the year paid to the extent the payment is transferred to an eligible retirement plan (as defined in section 402©(8)(B)) within 60 days, including the transfer to the eligible retirement plan of any property distributed from the eligible governmental plan. For this purpose, the rules of section 402©(2) through (7) and (9) apply. Any trustee-to-trustee transfer under this paragraph (b)(2) from an eligible government plan is a distribution that is subject to the distribution requirements of §1.457-6." The rationale, such as it is, is that the trust under a governmental plan makes it like an IRA or qualified plan, while the assets underlying a nongovernmental plan are held by the employer.

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I am getting conflicting information in regards to a Non Governmental 457 plan for a distribution.

 

Can the participant take a distribution (he's quitting) from the 457 plan and roll it over into an IRA or SEP IRA?

 

Some retirement specialists are saying no problem and others say no way. Please help. Plus if you can reference any website that verifies your answer, that would be much appreciated. Thanks.

 

What happens if a company goes into receivership. what happens to the assets in the 457 plan? If that plan goes to the receiver and is then distributed by the courts can it still be rolled over into an ERA?

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I am getting conflicting information in regards to a Non Governmental 457 plan for a distribution.

 

Can the participant take a distribution (he's quitting) from the 457 plan and roll it over into an IRA or SEP IRA?

 

Some retirement specialists are saying no problem and others say no way. Please help. Plus if you can reference any website that verifies your answer, that would be much appreciated. Thanks.

 

A big advantage to the 457(b) plan is that it is not subject to the age 59 1/2 withdrawal rule. This means there is no 10% penalty for early withdrawal at retirement or upon termination of employment. [Note: This benefit applies only to public (governmental) plans. Private plan participants generally will pay federal income taxes when funds are made available to them. They may, however, defer receiving funds and instead be taxed when they actually take distribution].

 

mariajassar@comcast.net

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