The ERISA consultants at the Learning Center Resource Desk, which is available through Columbia Threadneedle Investments, regularly receive calls from financial advisors on a broad array of technical topics related to IRAs and qualified retirement plans. A recent call with a financial advisor in Ohio is representative of a common question related to 403(b) plans. The advisor asked:
“If a company terminates a 403(b) plan, does the employer have to wait to set up a successor plan?”
Highlights of Discussion
Conclusion
If a sponsoring employer terminates its 403(b) plan, it may immediately establish a 401(k) plan — if it is otherwise eligible to do so. A waiting period may apply when the successor plan is another 403(b) plan.
The Learning Center Resource Desk is staffed by the Retirement Learning Center, LLC (RLC), a third-party industry consultant that is not affiliated with Columbia Threadneedle. Any information provided is for informational purposes only. It cannot be used for the purposes of avoiding penalties and taxes. Columbia Threadneedle does not provide tax or legal advice. Consumers consult with their tax advisor or attorney regarding their specific situation.
Information and opinions provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Columbia Threadneedle.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies.
© 2015 Columbia Management Investment Advisers, LLC. Used with permission.
