May I have all or part of my account transferred to an IRA or to another plan?
After you meet one of the conditions for withdrawal (typically separation from service), you may request that your eligible deferred compensation distribution to be transferred to a 401(a) plan, a 401(k) plan, a regular IRA, a 403(b) plan, or another government employer's 457 plan. A distribution is normally eligible for transfer or rollover unless it is (1) part of a series of substantially equal periodic payments made for your life or life expectancy or for the life expectancies of you and your beneficiary, (2) part of a series of substantially equal periodic payments made for a specified period of 10 years or more, (3) a withdrawal you are required to take because of age, or (4) a hardship distribution.
Not all plans will accept transfers or rollovers, however, so be sure to check with the new plan before requesting a transfer distribution. Also, keep in mind that account balances moved into another plan will be subject to the rules and procedures of the new plan, so be sure to research the new plan's rules before you make a change. If you transfer money out of a 457 plan, it will no longer be exempt from the 10% early distribution tax penalty. If you transfer money out of a 401(k) account, that money will never be eligible for forward income averaging.
If you decide to have your distribution transferred, you will need to complete a Lump Sum Distribution Request form for the appropriate State of Tennessee plan in addition to any forms required by the receiving plan. Submit your completed, notarized Lump Sum Distribution Request for 401(k) Plan or Lump Sum Distribution Request for 457 Plan to Empower. You will provide information about the plan that is to receive the transfer on that form. Your new plan/provider may require you to complete additional paperwork for them to accept the money, but their forms will NOT substitute for the applicable State of Tennessee distribution request form. No transfer from either state plan will be processed until a completed Lump Sum Distribution Request form has been received.
How do I request a transfer from the state's 457 or 401(k) plan to pay for prior service I am purchasing in TCRS?
The only circumstance under which you may make an “in-service” transfer from your 401(k) or 457 account without meeting the conditions for withdrawal is if the money is to be used immediately to complete your purchase of prior service in the Tennessee Consolidated Retirement System. After you have established your prior service eligibility with TCRS and received a current TCRS prior service billing statement, submit a copy of that billing statement along with your completed 401(k) Lump Sum Distribution Request form or 457 Lump Sum Distribution Request form to Empower. Empower will send the check directly to the TCRS Prior Service Office. Allow two to three weeks for processing.
For more information on purchasing TCRS prior service with a transfer, refer to the TCRS publication, Purchasing Prior Service with a Rollover, or contact the TCRS Prior Service Office at 800-770-8277 or 615-741-4868.
If you plan to purchase TCRS prior service with a transfer from a 401(k) plan, 457 plan, 403(b) plan, or IRA, TCRS requires you to complete a TCRS Application for Acceptance of Rollover Funds and submit it to the TCRS Prior Service Office.