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.

Plan-to-Plan Transfers

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).

Rollovers

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).

Plan Exchanges

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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