Can I use a 90-24 transfer for my 403B annuity to place it into an IRA with mutual funds? Or do I still have to transfer it to an annuity. I am still employed at the school district but I want a better performing vehicle.

Actually, Revenue Ruling 90-24 is the authority for moving money from one 403(B) funding medium to another. If you want to move money from a 403(B) account into an IRA, you use a direct rollover. The IRA can be any acceptable vehicle that accepts IRA funds.

Keep in mind, however, that in order to make the rollover, you must be eligible to receive a distribution from the 403(B) plan. Generally, you must have separated from service, attained age 59-1/2, or be disabled to receive a distribution.

Hope this helps. Good luck!

Most large mutual fund companies (Fidelity, Vanguard, T. Rowe Price, Janus, etc.) offer 403(B)(7) custodial accounts. Rather than moving to an IRA, open a 403(B)(7) account with the mutual fund company of your choice. Instead of a Tax-Sheltered Annuity (TSA), these are Tax-Sheltered Accounts (TSA) under the code, and they are nearly identical. Simply call the toll-free number for the mutual fund company and request a 403(B)(7) account application with a transfer form. Complete the forms and return them to the mutual fund company to get your account moved to the better performing investment of your choice. Please be aware, that you may not be able to make regular salary deferral contributions to your mutual fund 403(B)(7) account unless your employer has approved the mutual fund company as an investment option (call your Payroll Office and ask for a copy of the list of approved TSA vendors). This approval is not required, however, for a 90-24 transfer. Also, you may want to check with your current investment provider to insure that they will not deduct a surrender charge from your account prior to sending the money to the mutual fund company.

Sincerely,

Jeff Roberts, CPC
ADP Retirement Services
jeffrey_roberts@nas.adp.com

thanks for the reply. so is it correct that a 90-24 transfer is used only for 403b and not 401k?

That is correct. Revenue Ruling 90-24 applies only to trustee-to-trustee transfers of 403(B) funds from one 403(B) account to another 403(B) account.

If my employer is making contributions to my 403b can I still use the 90-24 transfer rule?

Rev. Rul. 90-24 is not specific as to the source of the funds being transferred. It simply states that money in a 403(B) account may be transferred into another 403(B) account.