You may rollover assets from another employer’s retirement plan or from an IRA into the U-M Basic Retirement Plan, the 403(b) SRA, or the 457(b) Deferred Compensation Plan at any time. U-M authorization is not required.
The following types of pre-tax eligible rollover distributions can be accepted: 401(a), 403(a), 401(k), 403(b), Governmental 457(b), and IRA. After-tax Roth amounts from another employer retirement plan can be rolled into the U-M 403(b) SRA and the 457(b) Deferred Compensation Plan. The Basic Retirement Plan cannot accept a rollover of Roth amounts regardless of source. In addition, Roth IRAs can only be rolled over to another Roth IRA and cannot be accepted by any of the U-M plans.
If you have 457(b) from a private university or college or from a tax-exempt 501(c) organization (such as a private hospital or private non-profit entity), it is classified by the Internal Revenue Code as a nongovernmental 457(b) plan. This type of 457(b) cannot be rolled over into any of the U-M plans. It can be transferred only to another nongovernmental 457(b) plan.
Rolling over amounts into the retirement savings plans gives you access to the lower-cost share class of mutual funds that are available through the U-M plans. Amounts you roll into any of the U-M plans are available for withdrawal while you are working for the university or after you terminate employment. Amounts you rollover into the 403(b) SRA and the 457(b) are also available to take as a loan.
Elective deferrals you may have made to another 457(b) retirement plan in the same calendar year will reduce how much you may contribute to the 457(b) plan at the University of Michigan.
How to Rollover Assets into a U-M Plan
Contact your previous employer and/or the investment company for their retirement plan to determine if you are eligible for a rollover. You may be required to fill out rollover forms for your previous employer and/or their investment company.
If you do not have one already, open an account with TIAA or Fidelity (or both) so the rollover will have a destination account ready to accept the assets. You may open your account online by selecting the type of plan for which you want to create an account and following the screen prompts.
Request or download and complete the TIAA or Fidelity rollover form. The form will ask into which U-M plan you want to rollover assets. Refer to the Plan Names and Numbers for the plan types and their record keeping number with TIAA and Fidelity.
Return all rollover forms, including any from your previous employer and their investment company, to TIAA or Fidelity for processing.
TIAA or Fidelity will contact your previous employer and their investment company to request the assets be sent to them.
The investment company for your previous retirement plan will send the rollover assets to TIAA or Fidelity for deposit into your account.
Review your account online and quarterly statement to confirm the rollover was completed successfully.
Refer to the Rollovers into the U-M Plan How-to Guide for printable version of this information.
If you roll over assets from another employer's Roth retirement plan, it can affect how the 5-Taxable-Year Period is calculated with regard to the amounts you roll over into the U-M plans. For example, direct rollovers and 60-day rollovers are treated differently, and the time you have accumulated toward fulfilling the 5-Taxable-Year Period may be adversely affected to determine if a subsequent distribution of the Roth assets rolled into the U-M plan is deemed to be a qualified distribution that is tax-free. For more information, visit umich.edu/benefits-wellness/financial/retirement-savings-plans/roth-options.
The IRS generally requires that an individual begin to take a minimum distribution from his or her account by age 72 (age 70½ if you were 70½ by December 31, 2019) in order to avoid a severe tax penalty. Amounts attributable as of December 31, 1986 that are 403(b) accumulations are grandfathered, and are not subject to minimum distribution until age 75. Electing a rollover eliminates this grandfathering feature; this may be important for tax planning.
In addition, if you are rolling over assets into one of the U-M plans from a different type of plan you had at a previous employer, it may affect the tax treatment of distributions that you will take later. This may cause you to lose important tax advantages.
Distributions from a 457(b) plan are not subject to the IRS 10% penalty for withdrawals made prior to age 59½. This penalty applies to a 401(a), 401(k), 403(a) annuity, 403(b), or an IRA. If you rollover a 457(b) plan into an IRA or a plan that is subject to the penalty, the exemption to the 10% is generally lost. Consult with a qualified tax adviser to determine if you may be impacted by electing a rollover.
Rollover Into an IRA
You can rollover assets into an IRA with TIAA or Fidelity instead of into the U-M plans. Rollovers into an IRA will give you flexibility for cash withdrawals, will consolidate your assets with TIAA or Fidelity alongside your U-M retirement accounts, and provides you a single quarterly statement. However, you will not have access to the lower-cost share class of mutual funds that are available through the U-M plans.