investment changes within accounts that are part o

L1: investment changes within accounts that are part oI am 53 and anticipate starting one or more SEPPs this year or next. I
have substantial funds in a 403(b) plan with a former employer and an
IRA and an IRA-SEP (for my consulting business). I”ve read Bill
Strecker”s book and find the content very helpful. But, I am not clear
on one point of significance.

I would like to be able to alter some of the underlying
investments in the accounts that compose my SEPP over the roughly 6
years before I reach 59 1/2- in order to adjust to changes in the
market- without breaking the SEPP. The case for doing this with
a single IRA seems clear to me; I could have an IRA account with stocks
and bonds and but/sell stocks and bonds while the account was part of a
SEPP without the 10% penalty being imposed.

However, the case for my 403(b) investments raises the question of what
an “account” is. For example, my TIAA/CREF investments are
described by TIAA/CREF as being in several “Accounts” where each
Account is a single investment (e.g. “CREF Stock Fund”). However, I
have three numbered “Plans” in TIAA/CREF terminology; they each have a
number; they have all been in existence throughout my investing life
with TIAA/CREF; these “Accounts” are in the “Plans”; I have
changed the underlying investments in a given “Plan” from time to time
over the last 30 years. So, a “Plan” as described by TIAA/CREF
seems similar to an IRA account in how it is used and the TIAA/CREF
“Account” term is more like a single investment.

If it were true that the TIAA/CREF Account was what
is meant by an account under 72(t) then I would have no ability to
change the investment over the life of a SEPP that included the Account
without breaking it. If the “Plan” is what 72(t) sees as an
“Account” however, I do have siginficant ability to change investments
during a Plan”s life in a SEPP.

So, my key question is how to match the 72(t) account
concept with TIAA/CREF”s terminology so that I don”t risk breaking a
SEPP. By the way, I would like to keep these funds in TIAA/CREF
during the SEPP”s life to get a number of investing advantages.

Thanks for any insights-
Dave Kirby
2006-04-28 09:53, By: JDK, IP: [65.190.210.127]

L2: investment changes within accounts that are part oLets start with the easy part – don”t confuse the TIAA/CREF terminology withwhat consiitutesa SEPP universe. What they call an account is not necessarily what another trustee/cutodianmay call an account.
When you begin, define your SEPP Universe using the accout numbers (and keep copies ofthe initial statements). If you transfer investments in theSEPP accounts underlying the SEPPmerely keepa really good paper trail of the changes so that it asked, you can produce a paper trailaccounting for the dollars from start to fuinish. Remember, once the universae is established there can be no outside additions and no additional withdrawals.
2006-04-28 14:14, By: Gfw, IP: [172.16.1.74]

L2: investment changes within accounts that are part oGfw,
Thanks for your reply! It seems that if I were to
read the word “account” in the IRS code quoted in Bill”s book in the
“Improper Transactions” section (and reproduced below) to mean
“SEPP Universe” that this part of Bill”s book and the reply that you
gave to my inquiry would be consistent.

Can you confirm that taking “account” to mean “SEPP Universe” is an
accurate way to interpret this language? If so, could you refer
me to some supporting IRS language for this definition of “account”?

-Thanks-
Dave Kirby

….From the Improper Transactions Section:
(e) Changes to account balance. Under all three methods, substantially equal
periodic payments are calculated with respect to an account balance as of the
first valuation date selected in paragraph (d) above. Thus, a modification to
the series of payments will occur if, after such date, there is (i) any addition to
the account balance other than gains or losses, (ii) any nontaxable transfer of
a portion of the account balance to another retirement plan, or (iii) a rollover
by the taxpayer of the amount received resulting in such amount not being
taxable.
Revenue Ruling 2002-62, .02(e)

2006-04-29 15:47, By: JDK, IP: [65.190.210.127]