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Tip of the Week: Employer Involvement in Plan-to-Plan Transfers

Editor’s Note: This is an occasional feature in the NTSA Advisor. It is drawn from The Source, a book that covers technical, compliance, administrative and marketing aspects of the 403(b) and 457(b) markets. More information about The Source is available here.

While it is not required under the final regulations that employers “authorize” each plan-to plan-transfer, it is likely that providers will require confirmation that plan-to-plan transfers are permitted out of the former employer’s plan and are accepted into the new or former employer’s plan. And, confirmation of the change in employers is likely to be required by vendors before transferring money to a new 403(b) plan.

Depending on the ease of the confirmation process, many employees may just choose to rollover the 403(b) account if the new employer’s 403(b) plan accepts rollovers.