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Ask Lane Your Own Question
Category: Tax
Satisfied Customers: 11861
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I am retired but serving on a City council since 2000. While

Customer Question

I am retired but serving on a City council since 2000. While I was working I set aside 100 dollars a month in a City approved ICMA differed fund for four years. I am now 68 and looking to combine all of my retirement funds into one account.
The problem is that I am still serving on the Council. They tell me it can't be moved to my B of A account.
Can I?
Thank you for your Consideration
Submitted: 2 years ago.
Category: Tax
Expert:  Lane replied 2 years ago.
There are two different sets of rules for a 457 plan like this.
(1) The Plan's "Plan Document," and
(2) the IRS rules for rollovers.
If you'll look at this IRS rollover chart, you see that th 457 plan (that's what this is) CAN be rolled to an IRA IF the plan has separate accounts (many governmental plans like this don't actually have separate accounts ... the money is pooled and there is accounting done that allocates the dollars that are yours (from the pool back to you).
SO, from and IRS perspective (number (2) above) if your plan has separate accounts, you can LEGALLY do this.
The other set of rules, however, is what YOUR PLAN allows. And as you can see from this information from IMCA, it looks as if their plans are designed such that you must have completely separated from service (any working relationship with the City) in order to make a withdrawal (even a rollover).
See this:
If you'll scroll down tho the section on withdrawals, you see that they say this:
"You can make withdrawals from your account when you leave employment. You have the ability to take payments as needed or request scheduled automatic payments. You maintain control over your investments and continue to benefit from tax deferral even after you leave your employer.
During employment, subject to your employer and IRS rules, you may also be able to make withdrawals after age 70½ or due to an unforeseeable emergency. A loan option may also be available."
You should ask if the plan has separate accounts... If not then this is not allowable from a LEGAL perspective.
If it DOES have separate accounts, then the next step would be to ask to see the "plan document," which they must provide by law, to see if in-service withdrawals are possible.
My best guess (not having ALL the facts) from looking at how IMCA designs their plans is that this may not be possible ... but there's no reason not to have ask about separate accounts and then look at the plan document to see for yourself.
Hope this helps
Le me know if you have questions ...
If this HAS helped, I would appreciate a positive rating (using the stars or smiley faces on your screen)… That’s the ONLY WAY I'm credited for the work here.
Expert:  Lane replied 2 years ago.
… just checking back in to see how things are going.
Did my answer help?
Let me know…
Expert:  Lane replied 2 years ago.
... just checking back in one more time.
I am a Chartered Retirement Plans Specialist (CRPS) along with being a CFP and have a law degree.
Retirement Plans is what I do.
Be glad to mke a call for you and check into some of the things I mentioned (finding out of your account as separate accounts and whether the pan document allows for rollovers, etc.)
Let me know ...
If this HAS helped, I'd appreciate a positive rating, using the smiley faces or stars on your screen ...   that's the ONLY WAY I'm credited for the work here