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Who Controls 403(b) Rollovers?

Q. Can a former employer control where a 403(b) account is rolled after employment? 

A. Under the rollover rules, individuals who are eligible to receive a distribution from a retirement plan, including a 403(b) plan, must be given the right to directly roll over that distribution to a variety of plans or accounts. The federal tax code says that rollovers from one plan type to other plan types, and to IRAs, are permissible. Based upon that, my conclusion is that the former employer cannot restrict this individual from rolling the 403(b) account to the 403(b) account of the new employer, as long as the new employer's 403(b) plan accepts rollovers into it. 

05/04/2015

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