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Employer Role with Roll Overs

Q: A client has a 403(b) account which was established via a Revenue Ruling (Rev. Rul.) 90-24 tax-free transfer in 2006. He now wants to roll over that account to an IRA, since is he over age 59½ and has also severed employment. Who needs to sign off on the rollover — the employer?

A: Actually, the client can deal directly with the company holding the 403(b) account since he is a grandfathered orphan account holder. Tax-free transfers under Rev. Rul. 90-24 that took place before Sept. 25, 2007 are not a part of his former employer’s plan; thus, there is no required employer involvement in the transaction. If the company questions this, refer them to Revenue Procedure 2007-71, which defines orphan accounts.

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