Benefits Plans - Retirement Savings Plans: Rollovers and Transfers -
TIAA-CREF and Fidelity Investments
|Basic Plan||SRA Contributions|
At any age
At any age
What is a direct transfer?
A direct transfer is a tax-free transfer made directly between investment carriers under a 403(b) plan and is not considered a distribution that results in a taxable event to the account holder. These are sometimes called a “90-24 Transfer” in reference to IRS Revenue Ruling 90-24 that permits transfers between investment companies in a 403(b) plan. See the Cash Withdrawals, Rollovers, Transfers, and Loans Chart (PDF) for a comparison to other options.
How does a direct transfer work under the U-M Retirement Plan?
A direct transfer allows you to move your U-M Retirement Plan accumulations between TIAA-CREF and Fidelity Investments.
Who is allowed to make a direct transfer?
Revenue Ruling 90-24 allows current employees, former employees, or a beneficiary of a former employee to transfer accumulations between a 403(b) plan’s investment carriers.
When can I make a direct transfer?
You can transfer accumulations between TIAA-CREF and Fidelity Investments at any time, while you are an active employee and even after you have terminated your employment with the University.
Aren’t TIAA Traditional accumulations under additional restrictions?
Yes. Accumulations in TIAA Traditional in the Basic Retirement Plan are not available for lump-sum cash withdrawals, rollovers, or transfers. These transactions occur over a nine-year period through a process called the TIAA Traditional Transfer Payout Annuity. Contact TIAA-CREF for information on how this process works. Note this does not apply to TIAA Traditional in the SRA, which may be transferred in a lump sum.
Are direct transfers allowed to companies other than TIAA-CREF and Fidelity?
No. TIAA-CREF and Fidelity Investments are the two companies for the University of Michigan Retirement Plan. You must elect a rollover to move accumulations out of the University plan and into another investment carrier through an IRA or another employer’s retirement plan.
Is a transfer different than a rollover?
Yes, these are two distinct types of transactions. There are differences such as when you may choose a transfer versus a rollover plus there are implications for taxation, minimum distribution rules at age 70½, and loss of certain plan features on rollovers that do not affect transfers.
How does a transfer differ from a rollover?
A direct transfer is used to move accumulations between investment carriers within an employer’s retirement plan. Federal regulations place several compliance and tracking requirements on direct transfers that the employer must meet, even for transfers to an investment carrier outside of the employer’s own retirement plan. Therefore, most employers limit direct transfers only to investment carriers under their own retirement plan, in order to service the accounts for plan participants and meet federal regulatory mandates.
A direct rollover is a cash withdrawal that moves the distribution into another investment vehicle, like an IRA. The employer’s compliance and tracking responsibilities are eliminated once the funds are cashed out of their plan. Since the employer is no longer required to administer the account, the cash withdrawal may be rolled over to another investment carrier using a different funding vehicle like an IRA, 401(k), or 457(b). Therefore, you must be eligible for a cash withdrawal under an employer’s retirement plan in order to elect a rollover.
Can I make a direct transfer to an IRA?
No. Federal regulations allow direct transfers only to another employer retirement plan. An IRA is not an employer-sponsored plan but an individual account and cannot accept a direct transfer. You have to elect a rollover to move accumulations to an IRA.
Can these issues affect how I manage a transfer or rollover?
It is critical that you know which type of transaction you are asking for so the investment carrier will send you the correct paperwork.
Example: if you want to move accumulations between TIAA-CREF and Fidelity you should ask for a direct transfer. However, you may receive a direct rollover application if the investment carrier is not clear on your intentions. This will delay your transfer until the correct paperwork is received.
What do I need for a direct transfer under the Basic Retirement Plan?
Contact the investment carrier you want to receive the transfer and ask for the direct transfer form. For example, contact Fidelity if you want to transfer some of your account balance from TIAA-CREF to Fidelity.
- Tell TIAA-CREF or Fidelity how much you want to transfer: the entire account balance or just a portion, the Basic Retirement Plan or the SRA, your contribution or just the University contribution. This will determine how many forms they will send to you.
- Complete the direct transfer application (including amounts to be transferred, from which investment funds, and into which investment funds at the receiving carrier) and return it to the investment company you want to receive the transfer.
What else do I need for a direct transfer?
You will need an account application for TIAA-CREF or Fidelity Investments so the transferred accumulations will have a destination account ready. Of course, if you already have an account established under the University of Michigan Retirement Plan you do not need to open another just for the transfer.
Is employer authorization needed for a direct transfer?
No. Since the accumulations are being moved to an investment carrier within the U-M Plan, employer authorization is not required.
Anything else I need to do for a direct transfer?
Yes, if you want to change which company will receive your future payroll deductions. Submitting the direct transfer and account applications only move accumulations already on deposit; it does not change where your monthly payroll deductions go.
You must submit the Salary or Annuity Option Plan Agreement to the Benefits Office in order to change which company receives the deductions taken from each paycheck.
Example: to transfer some of your accumulations from TIAA-CREF and Fidelity
- Submit a direct transfer form and a Fidelity Investments account application directly to Fidelity.
- Submit the Salary or Annuity Option Plan Agreement to the Benefits Office with a copy of your Fidelity Investments account application to change the destination of your payroll deductions. Otherwise, your payroll deposits will continue to go to TIAA-CREF.
Is “grandfathered” status for minimum distribution lost during a direct transfer?
No. Accumulations attributable as of December 31, 1986 retain their grandfathered status under a direct transfer. The receiving investment carrier will track any pre-1987 amounts that are transferred so that minimum distribution does not have to begin until age 75 as opposed to age 70½ on post-1986 amounts. This preservation of grandfathering status is lost when you rollover funds out of TIAA-CREF and Fidelity Investments under the University of Michigan Retirement Plan and into an IRA or another employer’s retirement plan.
Who can I talk to if I have questions?
You can speak with a consultant with TIAA-CREF and Fidelity Investments for questions and to request forms to process a direct transfer at the following numbers:
You can also meet with a consultant from TIAA-CREF and Fidelity Investments for questions or help on completing the applications. To make an appointment with a consultant assigned to work with the University of Michigan Retirement Plan call:
How do I arrange for a direct transfer?
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.