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Plan-to-Plan Transfers

Q. I have a client who has money in an employer’s 403(b) plan, and would like to move it to the employer’s 457(b) plan in order to take advantage of a self-directed brokerage account. The client has not separated from service, nor is he age 59½. Are transfers permitted from one type of plan to another?

A. No, unfortunately, transfers or exchanges can only occur within the same plan type. To get to another type of plan, the rollover rules would have to be used — and that means the client would have to be eligible to get a distribution. So, bottom line is — there is no way to move the money from the 403(b) plan to the 457(b) plan!  

12/15/2014

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