IRS to restrict transfers from 403(b) plans

Getting off the point of your post somewhat, don't many 401(k) plans offer this? For example, my 401(k) plan allows me to transfer 90% of my account to either a separate mutual fund account allowing me to by any open ended mutual fund (as opposed to the the menu offered by my employer), or a brokerage account where I can buy any available security. Or is the author referring to something else?

-Will

I believe the author is referring to the ability to take 403(b) assets out of the employer's plan altogether and move them to a custodian of your own choosing -- while you're still employed.

That's available within certain 401(k) plans already, too.

Do a search "mutual fund window"

When I search on that, I see articles about a self-directed brokerage option being offered *within the employer's 401(k) plan*. So you're still stuck with whatever broker the employer has chosen.

What I'm talking about is being able to completely withdraw funds from the employer's plan and re-deposit them at a custodian of your own choosing, even while still employed by that employer. I know that the

403(b) that teachers (and maybe other state/local govt employees) in MA have allows them to do just that.

403b plans are going away in their current form. The IRS is going to require a plan document, the 403b will look and act like the 401k.

Part of the reason is the 403b acts like a payroll deduction plan, that is a person can over withhold the IRS maximum and recordkeeping is bad. Participants also pay higher fees since in many plans it is treated as an individual product instead of a group one.

Nope - the "mutual fund window" generally refers to offering access to all of the funds within one or more families. In addition, some 401ks actually allow the use of a self-directed brokerage account for a portion of one's 401k investment, offering access to all that's available in that account.

ie.

(look under "An Improving Picture") or, from Furthermore, 10 percent of 401(k) plans in 2003 reported offering either a selfdirected brokerage window or mutual fund window option. The incidence of these window options has not changed much since 2000, when 8 percent of sponsors offered either a selfdirected brokerage window or mutual fund window. or You are still stuck, to a certain extent, to what the employer gives one access to - restrictions on the brokerage accounts available, or on the families of funds in the "window", but these are *way* more open then the 8 or 10 choices available directly within a typical 401k.