Transfers, Rollovers and Exchanges
You can only transfer, rollover or exchange funds if all Plans involved allow these distributions. These may be done without paying income tax or a tax penalty, as long as you follow some simple rules. Read more below about making sure your transfer or exchange is without tax penalty.
If allowed by both Plans, you may move your balance from a former employer’s Plan to your current employer’s Plan. With a plan-to-plan transfer, money is moved directly between Plans and is never distributed to you. This helps ensure a non-taxable transaction, but it can only be done if you have a qualifying distribution event (such as termination of employment).
If allowed by both Plans, you may roll over funds from a former employer’s retirement account into your new employer’s Plan. Unlike a plan-to-plan transfer, money is distributed to you. You then have to deposit the balance into your new Plan within a set period of time to ensure a non-taxable transaction.This transaction also requires that you have a qualifying distribution event (such as termination of employment).
If allowed by the Plan, you may move money between:
- Investment options of the same vendor
- Two approved vendors of the Plan
With a plan exchange, money is moved directly between investment options or vendors and is never distributed to you. This is a non-taxable transaction and does not require a qualifying distribution event.
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