(b)lines Ask the Experts – Preserving Contribution Sources in Plan Transfers

 September 23, 2014 (PLANSPONSOR.com) - “If we switch recordkeepers should the contribution sources be preserved?

“What if it is just a 403(b) plan-to-403(b) plan transfer (and not a complete plan transfer)?” 

David N. Levine, Groom Law Group, answers:


In general, yes. There can be exceptions but in most cases you should preserve the details of the source.  For example, if you move an existing employee deferral source, you should code the source similarly on a new recordkeeper’s system. Also, if anyone has basis in their accounts (such as after-tax or Roth contributions), this information should be transferred to and kept by the new recordkeeper. The same approach should be applied to 403(b) plan-to-403(b) plan transfers.

Thank you for your question!


NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.