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Practice Management

Transfers to a Non-Governmental 457(b) Top Hat Plan

Q. A plan says that a participant’s initial election shall be in installments, but upon severance a participant wishes to transfer their amount to another non-governmental 457(b). Does this lump sum transfer request override the installment election or would a new election need to be completed?

A. It depends on the timing (before or after the 60-day period); and the plan document language. For example, if the request is before the end of the 60-day period, then there is no question that they can complete a transfer request.