FAQ – 403(b)/457 Costs and Surrender fees

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I am changing districts. Can I transfer my 403(b), and will I have to pay any surrender fees?

The IRS allows, but does not require, transfers from one 403(b) plan to another (that is, one district plan to another district plan). You will have to check your old and new districts' employee plan documents to find out if transfers are allowed. If so, you will need to complete a plan-to-plan transfer request. Some investments, such as fixed and variable annuities, may charge surrender fees. If your new district offers the same vendor, you should be able to transfer your 403(b) without paying a surrender charge. However, if you must change vendors, be aware that if your investment has a surrender fee schedule, surrender fees may apply. If your new plan does not accept transfers, you may be able to leave your money in your old plan (although you will not be able to make further contributions), and simply open a new 403(b) with your new district. Alternatively, you may be able to roll over your current 403(b) assets into an individual retirement account (IRA). In this case, however, you may still be subject to applicable surrender fees by the vendor.

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