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403wtf

403B Rollover Old Employer Question

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My wife is a teacher and was contributing to a 403(B) through AXA Advisors. Half of the contributed funds are pre-tax and half are post tax. When we got married we decided we would like to only have two IRAs. One Roth and one traditional. We contacted AXA and the representative is adamant we cannot rollover/convert the 403(B) to an IRA without a qualifying event. She could not give me an example of what this was. I'm afraid she is thinking we are trying to take an early distribution based on the verbiage she used. Does anyone know what she might be referencing? I can't find anything on the IRS website or ERISA that states we cannot convert these funds. Additionally, my wife changed school districts in 2017 and the fund was transferred to the new school district as the employer - I know you can't transfer funds if you are still employed by the same employer but are we able to take the funds contributed (plus earnings) from her first job and rollover to an IRA? She has not made any contributions to her 403(B) since she changed jobs. 

 

Thanks in advance for any help

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On 7/10/2019 at 2:05 PM, 403wtf said:

My wife is a teacher and was contributing to a 403(B) through AXA Advisors

Sorry to hear that.

On 7/10/2019 at 2:05 PM, 403wtf said:

We contacted AXA and the representative is adamant we cannot rollover/convert the 403(B) to an IRA without a qualifying event. She could not give me an example of what this was. I'm afraid she is thinking we are trying to take an early distribution based on the verbiage she used. Does anyone know what she might be referencing? I can't find anything on the IRS website or ERISA that states we cannot convert these funds. Additionally, my wife changed school districts in 2017 and the fund was transferred to the new school district as the employer - I know you can't transfer funds if you are still employed by the same employer but are we able to take the funds contributed (plus earnings) from her first job and rollover to an IRA?

Let me make sure I understand. Your wife worked at District A and contributed to a 403b. She left District A for District B and rolled over the 403b to District B's 403b and now she is contributing new money to District B's 403b. Is that right?

Let's start with new contributions made to District B's 403b...I'm 100% sure you're not going to be able to roll that over to an IRA until a qualifying event happens (probably quitting or being fired).

The rolled over funds may be a bit more complicated. I'd be willing to bet that it will be treated no differently than the new contributions, but I don't know that for an absolute fact. My current 401k (very different from the 403b world) allows me to roll money into the 401k and then roll it back out whenever I want. I suppose it is conceivable that some 403bs may allow the same thing, but I'm skeptical. You'll have to reach out to the vendor and/or read all of the fine print to know for sure. It's too bad you missed the opportunity to rollover the 403b from District A to an IRA after quitting, that would have been allowable.

Finally, do you have a better vendor available in District B? You can roll EVERYTHING over to the better vendor if one is available.

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