403(b)s and 90-24 Transfers

On July 26, 2007, the IRS released the final 403(b) regulations, which included provisions that severely restrict the transfer or exchange of 403(b) assets after September 24, 2007.Today, 403(b) assets are transferred or exchanged under Revenue Ruling 90-24, which allows a tax-free exchange of one 403(b) contract, which may be funded with either mutual funds or a variable annuity, for another 403(b) contract that has no relationship to the sponsoring employer’s plan. This was the first change to Section 403(b) in over 40 years.

Requests for 403(b) exchanges received after September 24, 2007 may not be valid tax-free exchanges unless, as of January 1, 2009, the receiving company has signed an “information sharing agreement” with the participant’s employer.

Under the final 403(b) regulations, tax-free transfers or exchanges of 403(b) contracts under 90-24 must be completed on or before September 24, 2007. New informal guidance from the IRS has indicated that a 90-24 exchange be “completed” when there is a legally binding agreement between the transferring and the receiving companies to complete the exchange.

Future of 90-24 Transfers

Proposed regulations would restrict transactions to 403(b) products that are

approved by your employer.

The IRS’s proposed rules would require the employer to provide centralized coordination of its 403(b) program. These rules would require that 403(b) plans operate similarly to other existing retirement plans. These retirement plans will typically limit the number of investment options or vendors available to its plan participants.

What this means to you, is that you may not be able to transfer your 403(b) assets to the

vendor of your choice after 12/31/2007. The 403(b) products approved by your employer

may be limited to a certain number of investment options. If you have considered transferring your 403(b) account to another provider, now is the time to explore your options

.

Your next steps…

■ Determine whether or not your 403(b) allows for 90-24 (in-service) transfers.

■ Schedule a meeting with your trusted financial professional to help determine your options.

Comments

[paulnmark.Com]

Greate post. Keep writing such kind of information on your page. Im really impressed by your site. Hi there, You've done an incredible job. I'll definitely digg it and individually recommend to my friends. I'm confident they will be benefited from this web site.

[http://Www.youtube.com]

I really love your website.. Pleasant colors & theme. Did you make this site yourself? Please reply back as I'm hoping to create my own personal site and want to know where you got this from or just what the theme is called. Kudos!