Distribution Best Practices

In order to ensure the rules concerning 403(b) distributions are met, here are some administrative best practices for a third party administrator, product provider, or plan sponsor:

• Acceptable proof of age can be submitted to the product providers directly from the plan participants such as a driver’s license, passport, state photo ID or other acceptable identification with birth date.
• If providers have an acceptable record of participant’s date of birth in their records (as may have been required by FINRA or under the Patriot Act when establishing the account), the distribution request can be processed without any additional proof of age.
• If there is no TPA, then once the provider has confirmed that plan permits distributions at age 59½, employer authorization is not necessary. If there is a TPA involved, the authorization of whether the plan contains an age 59½ distributable event should be made by the TPA who then in turn authorizes the distribution.