Transfers from a 403(b) to a 401(k)

Q. You have a client who has an inactive 403b with their current employer; can that client transfer the 403(b) to the 401(k), or do they have to wait until they have a distributable event such as attaining age 59½ or termination of employment?    

A. Moving assets between a 403(b) and a 401(k) does requires a distributable event such as attainment of age 59½, separation from service, etc. 

Such a shift, however, would be a direct rollover and not a transfer and a reportable transaction. There is one exception that applies, and only in the case of church plans—the PATH Act permits mergers between 401(a) plans and 403(b) plans for churches. This was to fix the problem that arises when churches were sold a 401(k) instead of a 403(b), although it can be merged in either direction. Otherwise, a transfer/merger cannot be done between these two types of plans.