403(b)(7) Accounts
Frequently Asked Questions
A Custodial 403(b)(7) account allows
employee participants to transfer
their 403(b) assets and invest
in one or more mutual funds through
an
automatic salary reduction feature, which may provide more investment
choices than other 403(b) accounts.
For more specific questions, e-mail us at info@MidasFunds.com or
contact Midas Funds Shareholder Services at 1-800-400-MIDAS
(6432), 8 a.m.-6 p.m. Eastern Time.
What
is a 403(b)?
Is
a 403(b)(7) account a different kind of retirement plan?
What
types of investments are available for 403(b)(7) accounts?
How can
I fund my 403(b)(7)?
Is
there a minimum transfer amount?
Do
I have to take a Required Minimum Distribution (RMD)
if I have a 403(b)(7)?
What is a 403(b)?
A
403(b) is a salary deferred retirement plan available
to employees of tax-exempt organizations (i.e. religious,
education and health organizations) that are qualified
under Internal Revenue Code (IRC) section 501(c)(3).
Generally a 403(b) plan can either be a 403(b)(1) tax-sheltered
annuity contract (TSA)
issued by an insurer, or a 403(b)(7) custodial account
that is exclusively invested in mutual fund shares.
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Is
a 403(b)(7) account a different kind of retirement plan?
A
403(b)(7) account is not a retirement plan in itself.
It is a cash account that allows employee participants,
usually public school teachers and government employees,
of an employer sponsoring a non-ERISA 403(b) to transfer
403(b) assets to Midas Funds and use Midas Fund's
services to invest and trade those assets.
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What
types of investments are available for 403(b)(7) accounts?
Mutual
funds are the only available investments in a
403(b)(7) account.
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In
what ways can I fund my 403(b)(7)?
Contributions
are not made to 403(b)(7) accounts. Midas Funds only
accepts 403(b) assets through a transfer (TOA) or rollover
transfer (TOA), in which the assets accumulated in a
403(b) account held elsewhere are brought over to Midas
Funds.
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Is
there a minimum transfer amount?
Transfer
of Assets (TOAs) amount must be a minimum of $1,000.
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Do
I have to take a Required Minimum Distribution (RMD)
if I have a 403(b)(7)?
Yes.
The required beginning date (RBD) is April 1 of the
year following the year you reach 70-½ or the
year you retire, whichever is later. If the RMD is
not withdrawn per the outlined schedule, the IRS can
impose a penalty equal to 50% of the RMD amount
left in the 403(b)(7). Due to the complex nature of
the 403(b)(7) distributions, you should speak to your
tax advisor prior to making a 403(b)(7) distribution.
If
you have more than one 403(b)(7) account, you can aggregate
the RMD amounts
and take your entire RMD distribution
from a single 403(b)(7). You do not need to take an RMD from
each 403(b)(7), regardless of location or administrator.
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