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403b Rollover

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If a participant in a 457 plan rolls over a prior employers 403b plan into the 457 plan, does he lose the ability to roll those 403b funds over to another 403b while he is still employed with the company with the 457?

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First, let's make sure everything is in working order. The 457(b) is sponsored by a government. If not, the rollover itself cannot go into the 457(b) plan. Also, the 457(b) document would have to allow for the acceptance of such rollovers, and the funds rolled into the 457(b) plan could not include any after-tax amounts.

 

That being said, the 403(b) rollover, now in the government-sponsored 457(b) plan, is subject to the distribution timing requirements of the 457(b) plan. However, if the 457(b) document was crafted in such a fashion to allow distributions of rollover accounts at any time, then those rollover accounts in the 457(b) plan would have special treatment and could be paid out. It will completely depend on the 457(b) plan language.

 

Hope this helps!

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