rollover rules

I also have funds with TIAA-CREF. As I understand the structure of the account, it's not really a standard 403B plan. I think it's structures as some kind of annuity. And indeed according to the contract (probably true of all similar contracts) you are restricted in moving the funds out of TIAA-CREF. You can move the funds within TIAA-CREF as you wish, but not out of the company.

I got the impression from Fidelity's literature on annuities that some annuities can be transferred into another without causing a taxable event. The post-tax part would stay post-tax and ditto for pre-tax.

I have more information for you. Right after I read your post I got an email from TIAA about rolling over to an IRA. So I gave them a call. Turns out my accounts both allow roll overs. I can either roll into a TIAA IRA or to another company (in my case, Fidelity). The agent told me that indeed there are institutions that have contracts with TIAA that don't allow roll overs. This is essentially a paternalistic attitude to "protect" people from rolling the funds out and spending their retirement money.

So the answer is it depends on the contract your employers have with TIAA. It seems that they want to protect you from your own financial foolishness and prevent you from taking a hold of your retirement funds.

Thanks all.

I spoke with TIAA-CREF again today, and then with the benefits department of my former employer. This really is a 403b and the University really does forbid anyone to move funds out of the plan before age 55. The benefits person was nice enough and said she had fielded similar complaints in the past.

I asked who set the policy and how I could complain. She said I would have to write the Trustees of the University. She agreed that it was paternalistic, but that it was perfectly legal and the University has never made any exceptions.

I think it should be illegal and I am surprised it isn't already.

PeterL wrote:

I was also told that I could not even move to an IRA within TIAA-CREF. I must use the plan the University chooses, even though I no longer work for them.

"revheck" wrote

Isn't it the law, not the University, that forbids the movement of founds out before age 55, etc.? So this is jut business, underwritten by Congress? The vernacular "403(b)" of course refers to some specific part of federal tax yada law. (No need to google and post an "Actually,... " folks. Specificity is not needed to make the point here, if one thinks.

Plus ya know you could have researched this before investing in it.

Ya know what really miffs me is that you got to contribute in the neighborhood of $14k a year to this plan, while I am not allowed to put a cent into my Roth IRA unless it's employment income. You think anyone gives a darn about my objection? Of course not. One chooses. Then one votes for change and does the best one can with the outcome.

No, it is not the law. It is the rules established by the University for this plan. Many, if not most, plans allow roll overs after leaving employment. I have 5 other accounts that allow roll overs, no problem.

These are employer contributions. I had no choice in plan or amount of contribution, only how to allocate within the 6 funds available in the plan.

I'll tell you what's really going to miff you. I am allowed to contribute up to 30K a year pre-tax to two different plans. But I exchange that by accepting lower salary in government and non-profit service. Whereas those who are in the private sector get company match to their contribution, I get nothing. It's all my money.