Portability rules make your retirement account interchangeable with most types of plans. As long as you have met a triggering event that would allow a distribution, you are permitted to roll over your assets from your 403(b) or 457 account into any other eligible retirement plan. The rollover can be made by you or your spouse-beneficiary . Different rules may apply to a non-spouse beneficiary.
The type of plans that are eligible are as follows:
- 401(a) defined contribution and defined benefit plans. The amount that can be rolled over will only be those amounts that you may take as a lump-sum distribution or that you have access to in installment periods of 10 years or less.
- 401(k) plans.
- 403(b) plans.
- 457(b) plans sponsored by a governmental employer. You cannot rollover your assets to a 457(b) plan of a 501(c)(3) organization or from a 501(c)(3) plan to a government 457(b) plan.
- Traditional deductible IRAs. If you have a non-deductible IRA it cannot be rolled into an Employer’s Plan.
- Simple plans to Simple plans if the distribution is made after two years.
Roth 403(b), Roth 401(k) and Roth 457(b) assets can also be rolled over to eligible plans as long as there is a designated Roth account within each of the plans involved. Roth 403(b), Roth 401(k) and Roth 457s can be rolled into a Roth IRA, but a Roth IRA cannot be rolled into a Roth 403(b), Roth 401(k) or Roth 457(b).
For a complete list, refer to the following IRS Rollover Chart.
Although every plan allows for rollovers out of the plan, not all plans accept rollovers into their plan. You will need to check to ensure your receiving plan will accept the rollover.
Even though the rollover may be allowed, the funds may have to be tracked in the account separately to manage a more restrictive distribution requirement that stays with the funds from the plan type where the funds were initially invested.
For example, if funds are rolled over to a 457(b) account from a 401(a), 403(b), 401(k) or IRA, there may be early withdrawal penalties if a distribution is taken pursuant to severance from employment. If a rollover is made from a 457(b) they may need to be separately tracked or segregated due to a restriction on in service distributions.