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kev

? - Can I Still Transfer This 403b $$?

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Here is the situation:

 

I realize that the new 403b regs prevent some of the transferring of funds to other fund companies that once went on (90-24). Before those regs went into affect, I transferred most of my contributions from AIM to TRP. All of the funds did not transfer at the time because some of the funds were "employer contributions" (leftover health insurance $.) It was not a big deal, because I had planned to keep some funds with AIM anyway as I was happy with a couple funds they offered.

 

Now, with the new regs, I am starting to get spread out in more fund companies and funds than I would like. I will be making contributions to Vanguard or Fidelity when the new regs take affect in January. Here is my question -

 

Can I take the funds I currently have with AIM and roll them into TRP? I talked to AIM and they said all I need to get around the "employer contribution" part is a directive from the school, on letterhead. So, that is not an issue. TRP is on our list of 20+ current providers - so it would not be a transfer to a company outside of our current plan. Is this type of transfer still permitted?

 

I am just trying to consider my options as January approaches. I will either be moving this money to TRP, or to the new vendor (fidelity or Vanguard) I utilize in January.

 

Thanks

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Kev,

 

As TRP is not on the list of vendors that you provided, I am assuming that they will not be in your plan document and therefore you will not be able to transfer funds to them as it is after the 9/25/07 date. Since your district is utilizing the local option, you may want to check with your TPA about the possibility of having TRP listed on the plan document as a transfer company only and at that point your TPA will have to have some type of information sharing agreement with TRP. I hope that helps.

 

Thanks!

Darren

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Yes - but they ARE in our plan right now. I am wondering if I can make the transfer right now to another fund company that IS currently in our plan. I know I cannot starting in January - but can I do it before then?

 

Thanks

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This is where the new IRS regulations are somewhat maddening. Even though the new regulations do not go into full effect until 1/1/09, new regulations on transfers begin back on 9/25/07 when the 90-24 rule was revoked. The IRS clearly stated that any transfers that took place between 9/25/07 and 1/1/09 were subject to the vendor and the employer having a signed information sharing agreement and that the vendor would be listed on the employer's plan document as of 1/1/09. For any transfers that occur during this time and do not meet the criteria, the participant has until 6/30/08 to "make it right" - in other words transfer the money to a vendor that is approved under the employer's plan document, or the participant will forfeit their qualified tax status and taxes will be due on that money immediately.

 

Thanks!

Darren

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Thanks -

 

I wonder if there is anything on Earth that the government cannot make significantly more complicated than it ineeds to be:)

 

 

 

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