Benefits Plans - 457(b) Deferred Compensation Plan:
Rollovers Out of the U-M Plan
May a distribution from the U-M 457(b) plan be rolled over into another eligible retirement plan?
What is an eligible retirement plan?
An eligible retirement plan includes the following:
- Governmental 457(b)
What kinds of distributions can I rollover?
- Cash withdrawals
- Fixed period annuities of less than 10 years
What kinds of distributions cannot be rolled over?
- Minimum distribution payments
- Lifetime annuities
- Fixed period annuities of 10 years or longer
When am I eligible to take a rollover as a current faculty or staff member?
You may rollover your accumulations if you take the one-time withdrawal or at age 70 ½ or older.
When am I eligible to take a rollover as a former faculty or staff member?
At any age. A former faculty or staff member is someone who has terminated employment with the University of Michigan. Termination of employment does not include being on a leave of absence, layoff ( RIF), period of non-appointment, 0% appointment effort, phased retirement, retirement furlough, or being on long-term disability.
How do I arrange for a rollover?
Contact TIAA-CREF and/or Fidelity and request a rollover application. Return the investment carrier’s application to them after you have completed the form.
Note: Rollovers May Result in the Loss of an Important Tax Benefit!
The exemption to the IRS 10% early withdrawal penalty only applies to a 457(b) plan. Once you roll it over to another eligible retirement plan, like an IRA or 403(b), it generally becomes subject to the 10% penalty if you cash it out before 59 ½.
Consult with a qualified tax advisor.
The University of Michigan in its sole discretion may modify, amend, or terminate the benefits provided with respect to any individual receiving benefits, including active employees, retirees, and their dependents. Although the university has elected to provide these benefits this year, no individual has a vested right to any of the benefits provided. Nothing in these materials gives any individual the right to continued benefits beyond the time the university modifies, amends, or terminates the benefit. Anyone seeking or accepting any of the benefits provided will be deemed to have accepted the terms of the benefits programs and the university's right to modify, amend or terminate them.