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).
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
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 ...
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