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Amount Eligible to Roll Over Via In-Service Transfer

Q. You have a client with an existing 403(b) fixed annuity with a deemed loan against it who would like to transfer the annuity and re-invest in mutual funds within a 403(b) held by an approved vendor in the school district. Would the policy holder be able to roll the entire annuity account balance, including the deemed loan amount, or some lesser portion?

A. The policy holder first should look at the loan agreement with the annuity company. There are some firms that require collateral until the loan is paid off (even a deemed/defaulted loan). If that is not the case, then the assets can be exchanged to another approved vendor in the employer’s plan. That new vendor should take over the responsibility of getting the previous loan information, should the participant ever want to pay off the loan someone would need to determine what the value is (adding interest that has accrued on the loan).