No. of Recommendations: 0
Greetings, Tombarb, and welcome.

<<Until 2/1/98 I was employed by a hospital based physician who was a member of a nonprofit physicians organization. My benefits were the same as all hospital employees including my eligibility to participate in the hospital's 403(b) plan. The cost of all these benefits was reimbursed to the hospital by the physicians organization. As of 2/1/98 the physicians joined a new for-profit organization. My employment status changed to "hospital employee, leased to a for-profit organization." Now my paycheck comes from the hospital and my benefits are the same EXCEPT that I CANNOT CONTRIBUTE TO THE 403(b) plan as a hospital employee who is leased to a for-profit organization. I can contribute to the for-profit organizations 401(k) and I am doing this. The leased employees have been told that we cannot roll our 403(b) money into an IRA or other qualified plan until we become employees of the for-profit organization. This may occur in the year 2000 or never if the physicians find that they are saving money by leasing their employees. I have checked the contract and no where in it can I find anything that relates to this situation.
In the Withdrawal Restrictions before age 59 1/2 one of items states that the account can be paid out if the employee is separated from service with the employer.

This is really getting complicated. Can someone out there explain to me why I can't roll this money into an IRA if I can't contribute to the plan any longer? I can't seem to get a straight answer from the 403 plan reps, human resources at the hospital or human resources from the new organization. Should I consult a lawyer, accountant or just accept what has been laid out?>>

You're in a "Catch-22" situation created by the fact that you haven't changed jobs nor has the 403b plan been terminated. It's just that now you happen to be a leased employee doing the same job at the same place of business. All that's changed is your employer. In such situations, a number of rulings have been made by the IRS that you are not eligible to receive a distribution of the 403b money. You'll just have to wait until you leave that job to roll that money elsewhere. It's a difficult concept to grasp, I have never fully understood it, but it is a fact - and one with which you must live until you either become a regular employee of the physicians or leave your employ as a leased employee.


Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.