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403(b) Transactions Information

Obtaining Transaction Authorization


CCC offers Plan Administrative Authorizations for plans CCC administers in various formats, depending on the transaction type.

CCC offers Authorization Vouchers for the following transaction types:

  • 403(b) Distributions to the Participant (for qualifying events of Severance from employment and attainment of age 59.5)
  • 403(b) Rollover Distributions (for qualifying events of Severance from employment and attainment of age 59.5)
  • 403(b) Contract Exchanges within the Plan
  • 403(b) Plan-to-Plan Transfers out of the Plan

For more information on requesting an Authorization Voucher, please click here.

Click here for information on submitting 403(b) Loans for authorization.

Click here for information on submitting 403(b) Hardship Distributions for authorization.


For all other transaction types

Participants may request plan authorization by completing the following steps:

The CCC Transaction Submission Form is to be used to submit any transaction type except 403(b) Loans and 403(b) Hardships, which have a unique CCC Forms.

For more information on 403(b) transactions, including descriptions of the transaction types, click here.

View: CCC's Authorized Signatures Letter

Information Concerning Rollover Options and the Taxation of Distributions

When taking a rollover or distribution from a 403(b) or 457(b) account, one must consider all options available to them and the tax consequences associated with those options. Most vendors provide a notice called a "402(f)" that describes the various rollover options and the applicable taxes associated with distributions and rollover options that comes as a part of or addendum to the vendor's distribution and rollover forms. Usually the participant's authorization section of one of these forms requires the participant to attest to the fact they have read the notice pertaining to taxation and understand the applicable tax consequences of the transaction they are submitting. (Please note: the IRS provided generic model language for 402(f) Notice in 2009 (Notice 2009-68), this model language is viewable here.) CCC strongly encourages participants to seek the advice of a qualified and trusted financial advisor and/or tax consultant concerning investment and distribution choices.

 

General Information Regarding Transactions

Carruth Compliance Consulting (CCC) serves as Third Party Plan Administrator (TPA) for Employer’s sponsoring 403(b) Plans. In this role CCC provides transaction processing for our clients. CCC conducts the appropriate due diligence required to determination eligibility for a given transaction prior to authorization.

Before you submit a transaction to CCC, please note the following information regarding transactions:

  • Transaction may be restricted by a vendor’s investment agreement
  • All transactions are subject to their availability as an “optional feature” under the 403(b) Plan Document(s) for the Employer(s) associated with a transaction.
  • All transactions are subject to meeting established requirements, see below for additional information.

Exchanges and Transfers: Transaction Definitions and Requirements


Contract Exchange: A Participant’s 403(b) Account Assets under an Employer’s plan are moved to a new or existing 403(b) account under the same Employer’s 403(b) plan.
Requirements: The receiving Vendor must be a Vendor that is eligible to receive exchange and transfers in the Employer’s plan.

Plan to Plan Transfer OUT of the Plan: Funds in a 403(b) Account associated with an Employer (the “releasing” plan) are moved to another Employer’s 403(b) plan (the "receiving" plan). Note: The account may remain with the same Vendor (referred as an "internal transfer") it may be moved to another Vendor available in the new Employer’s plan. The funds transferred to the "receiving" Plan are subject to that plan's distribution requirements.
Requirements: Participant must be eligible for a distribution out of the releasing Employer's plan. Please see "Regular Distributions out of the Plan" for more information on eligibility for a distribution. Also see Plan to Plan Transfer INTO the Plan below.

Permissive Service Credit Transfers: Funds in a 403(b) account are transferred to the State Retirement Plan for the purpose of purchasing service or waiting time.
Requirements: Participant must provide documentation from the State Retirement Plan detailing the amount needed to purchase service or waiting time, along with any transaction documents required to facilitate the transfer of funds, for the Plan Administrator to provide authorization..

Distributions: Transaction Definitions and Requirements


Regular Distributions OUT of the Plan: A Participant withdraws the funds in a 403(b) account and directs the payment to his/herself.
Requirements: A single Qualifying Event must occur to for a Participant (or in the event of death, the beneficiary or beneficiaries) to distribute the funds. These events include:

  • Attainment of Age 59 ½
  • Severance from Employment Severance is defined as a complete severance from any employment relationship with the Employer sponsoring the 403(b) plan.
  • Disability (Disability in this context is defined as the inability to participate in gainful employment of any type due to a disability or illness that is of an indeterminate length and/or will result in the Participant’s death (official documentation of the disability, duration and work status required) ).
  • Death (See below for additional information).

Required Minimum Distribution (RMD)

Required Minimum Distribution are minimum amounts that a retirement plan account owner must withdraw annually starting with the year that he or she reaches 70 ½ years of age or, if later, the year in which he or she retires.

Your first required distribution must be made by April 1 of the year following the year when you turned 70½. For example, if you turn 70½ in February 2018, you must take your first RMD by April 1, 2019. The IRS calls this your Required Beginning Date.

There's an exception to this rule: If you're still working, you can generally delay RMDs, but only from the retirement plans you participate in with your current employer. In these situations, your first distribution must be made by April 1 of the year following the year of your retirement.

RMD Example

You reach age 70½ February 1, 2018
You wait until the deadline to take your first distribution April 1, 2019
Your second distribution is due December 31, 2019

Note: [Treas. Reg. § 1.403(b)-6(e)(7)] Distributions from section 403(b) contracts do not satisfy the minimum distribution requirements for IRAs, nor do distributions from IRAs satisfy the minimum distribution requirements for section 403(b) contracts.

Rollover Distribution OUT of the Plan: A Participant withdraws the funds in a 403(b) account and directs the payment to another qualified retirement plan. Note: The account may remain with the same Vendor (referred to as an internal rollover) or it may be moved to another Vendor.
Requirements: Same as a Regular Distributions OUT of the Plan (see above).

Death Beneficiary Claim: A Beneficiary of a 403(b) account moves the account assets from a deceased Participant in an Employers plan into the beneficiary's name, by rolling the funds into another qualified retirement plan or directing the distribution to his/herself.
Requirements: A copy of the deceased Participant’s death certificate must be provided and the Beneficiary information must be verified with the Vendor.

Hardship Distribution: Please see our dedicated "Hardship Distribution" link in the left-hand navigation menu or click here for information on Hardship Distributions and the required CCC Hardship Form.

Distribution of assets via QDRO (Qualified Domestic Relations Order): Please see our dedicated "QRDO" link in the left-hand navigation menu or click here for information.

Loans: Transaction Definition and Requirements


Loans: Please see our dedicated "Loans" link in the left-hand navigation menu or click here for information and the required CCC Loan Form.

Types of Contributions


Employee Elective Deferrals (via Salary Reduction): An employee establishes a 403(b) account then begins making contributions by requesting part of their salary be deferred to the account by reducing their pre-tax salary by an elected amount.
Requirements:A Salary Reductions Agreement (SRA) must be submitted to the Employer along with documentation that the account has been established with a Vendor with an Active Payroll Slot under that Employer's 403(b) plan. The SRAs and the 403(b) List of Vendor is available Employer's dedicated page (accessible from the "Employee Entrance" link at the top of the page.)

Plan to Plan Transfer INTO the Plan: This is the "receiving" side of a Plan to Plan transfer (above).
Requirements: The accountholder must be an eligible participant in the receiving plan and the vendor receiving funds must be eligible for transfers under the Plan. Funds transferred into a Plan via Plan To Plan Transfer are subject the receiving Plan's distribution rules .

Rollover Contributions into the 403(b) Plan: A participant withdraws the funds from a qualified retirement plan (IRA, PERS, 457(b), 401(k), etc.) account and directs the payment into a 403(b) account sponsored by his/her Employer. Note: The account may remain with the same Vendor (referred to as an internal rollover) or it may be moved to another Vendor. The vendor must track the "rolled in" amounts separately from other contributions to the receiving account so those "rolled in" funds maintain their ability to be distributed without restriction.
Requirements: The participant must have established the receiving account while employed by the sponsor of the receiving plan. The receiving vendor must be a vendor that is eligible to receive exchange and transfers in the employer’s plan.

 

Page Last Modified: 12/6/2018 7:02:09 PM