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Rolling Over a 403(b) to an IRA

Q. My client has severed employment with her current employer, and, now wishes to roll her 403(b) account to an IRA. Her 403(b) account is an orphan account, and the company holding that account has received no contributions since before 2004; thus, it is a grandfathered account. The company holding the account has refused her request for a direct rollover to the IRA unless the employer authorizes the rollover. What can my client do to complete the rollover?

A. The employer should simply notify that company that employment has been severed. Once that is done, the company must honor the direct rollover request without employer signature. Employers do not need to be involved in grandfathered orphan accounts. In addition, the notice of severance establishes that your client is eligible for distribution, in which case direct rollover rights must be provided.

08/25/2015

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