An employee was participating is employer A's (non-Gov't tax-exempt org) 457(b) plan and terminated employment. He had elected to receive payments in 5 annual installments beginning 2010. Since then, the employee has become employed by employer B (also a non-Gov't tax-exempt) that also has a 457(b) plan for which he is eligible. Both plans allow for transfers and receipt to and from other 457(b) plans of private tax-exempt organizations.

1. If the employee transfers his account from employer A's plan to employer's B, does the elction he made of 5 annual installments effective 2010 remain in place? And if so, how can the distribution occur while still in-service?

2. If he had originally elected a lump-sum upon separation from service but elected to transfer the account prior to the distribution date, can his account be transferred to plan B and take on the features of the new plan and any new elections allowed?