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Differences between a Rollover, Exchange, and Transfer

  • Rollover – A transfer of holdings from one retirement plan to another, without tax. A rollover can involve a change of employers, a change of investment providers, a change of plan type (i.e. from a 403b into a rollover IRA) or a combination of all three.

  • Exchange - An exchange allows the participant to change investment providers without being separated from service or having attained the age of 59 1/2. Exchanges can only be done WITHIN THE PLAN. Funds cannot be exchanged to a plan with a different employer or to a different type of plan, only to a different vendor.

  • Transfers - Transfers occur when a participant moves to a new employer and wishes to retain their 403(b) account that they set up with their previous employer. TCG Administrators does not allow for transfers out of a plan that we administer. The participant would need to apply for a rollover and open a new 403(b). Transfers in are allowed, but rarely require the approval from TCG Administrators. If a participant states that their vendor does require our signatures on the vendor forms in order to process a Transfer IN, TCG will sign this paperwork. In this instance, the participant does NOT need to submit a TCG distribution form, but it is helpful if they indicate somewhere on the paperwork or on a cover letter that the request is a Transfer In specifically. A Transfer IN will only ever be from a District/Employer we are not the TPA for, to a District/Employer for whom we are the TPA. If a participant were trying to Transfer IN funds for a District/Employer for which we were the TPA, we would need to approve the corresponding Transfer OUT and we do not all transfers out.

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