David G
Jul 13 2000, 02:31 PM
May a 457 plan sponsored by a governmental employer accept a plan to plan transfer from a 457 plan sponsored by a tax exempt employer?
Carol V. Calhoun
Jul 20 2000, 02:03 PM
Yes, provided that the recipient plan provides for such transfers. (Many do not, and plans are only permitted, not required, to include provisions permitting such transfers.)
David G
Jul 20 2000, 02:30 PM
I received an informal response from a local IRS employee who spoke with their National Office that a transfer from a tax exempt to a governmental would be okay if the other requirements were met, but that a transfer from a governmental to a tax exempt would not work because of the exclusive benefit provision in 457(g) for governmental plans.
Carol V. Calhoun
Jul 20 2000, 02:37 PM
That is interesting, and I'm not sure it is supported by law. However, it undelines the need for some kind of rollover mechanism for 457 plans, since apparently the IRS is taking the position that even the one current mechanism for making such plans portable is quite limited in its scope.
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