403B into IRA

[scagnt83]

This is a first for me, so any direction here is welcome;

Im rolling over a 403B into an IRA.

The 1035/transfer paperwork had a place for the trustee to sign if it was a 403B transferring to another 403B; we had planned to transfer it to an IRA so I didnt get it signed...

Today the client gets a call saying they need the trustee signature.

Then the client is told that the funds cant be transfered because it not another 403B; to transfer from 403B to an IRA there has to be a triggering event...
(This is a dead 403B that has not received contributions in over 10 years, and the clients school district has a 401K that they are contributing to; the surrender period is up too)

Is this correct?? I have never heard of it, but the NYL lady swears that its IRS regs... seems fishy, but I know that 403Bs are a different animal....

Opinions? Experiences???

 

[briko3]

Re: Huh??

403bs in a school district can be rolled in to an IRA at any time (while the person is working or not). No triggering event required. This woman either doesn't know what she's talking about or she's blowing smoke.

Hope this helps.

 

[scagnt83]

Re: Huh??

403bs in a school district can be rolled in to an IRA at any time (while the person is working or not). No triggering event required. This woman either doesn't know what she's talking about or she's blowing smoke.

Hope this helps.

Thats what I thought; I figured she was blowing smoke.

Did you need the TPA or employer signature for the transfer to the IRA?

Long story short, the client is my mom. Im at her house eating dinner tonight and the phone rings and its NYL, calling about her transfer. They tell her they need the signature from the TPA of the plan, and of course she has no clue what they are talking about!

Fortunately, out of sheer luck, I was there and she put me on the phone with them.

The lady tells me about the signature and when I question her about it (because it states its needed only for TSA to TSA transfers) she says thats not true.

Then she puts me on hold and comes back with the triggering event bs; and says that its IRS regulations. Well I ask her to give me the IRC that it falls under and she says she doesnt know, but thats what she was just told by her manager..... I told her that wasnt true, and she says that theres nothing that can be done about it.

I also questioned her about calling the client for outstanding requirements instead of going through proper channels; I was told that was regular procedure for them...

I immediately got a reference number for the call and will be on the phone with NYL and the receiving company in a joint call first thing monday!!
Companies will do anything to hold up a transfer it seems

 

[HarryRenard]

Re: Huh??

I have NEVER heard of a company calling the customer for requirements, that seems a little crazy.

And yes you have some companies that will transfer money out right away and the other half will fight you tooth and nail.

Is it Valic? if so you have a seriously long road to hoe. They are the worst.

 

[0b1kanobee]

Re: Huh??

This sounds like Valic to me as well as Harry stated. You can put your client at ease by letting them know if it is this hard to do a transfer just imagine trying to actually get you money.
I'll run this by my brother and see if he knows of any snafoos as he and I work the 403b market but if you can, post where you are trying (company) to rolll out of (old 403b) as there are some things that might come up as you go especially if it is Valic.

 

[briko3]

It shouldn't require the signatures and she was out of line to call. If it is Valic, she can look at her account online and find out the name and number of her "financial planner". I would call that person and tell them what has happened and tell them you are going to file a complaint with the state and the school district. I would also follow up on that threat.

Good luck!

 

[HarryRenard]

Again with the complaints and reporting to the DOI. Your gonna report a CSR that would accomplish a lot.
I thought we were Insurance agents not police officers.

This is controlled biz so your lucky you can always, just request a check and have it made out to the new company and your done.

 

[scagnt83]

Its my old captive NYL.
I think the local GA im with has been marked for death by them... as a group we have had more trouble transferring funds from them lately. (we are also all former NYL agents...)

I was pretty pissed they called.
I cant believe I was fortunate enough to be there when it happened... lol.

Whatever supervisor I get a hold of on Monday is certainly going to hear it. I think I still have a contact sheet for their Cleveland Annuity Servicing Office, so I should be able to call a manager directly
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Again with the complaints and reporting to the DOI. Your gonna report a CSR that would accomplish a lot.
I thought we were Insurance agents not police officers.

This is controlled biz so your lucky you can always, just request a check and have it made out to the new company and your done.

I thought of doing that in the first place, but I try to keep the client out of the transfer process as much as possible if I can.

Plus this is a very small account, so I just dont get the resistance.
NYL was quick to act; they called the same day they received the request.

 

[HarryRenard]

That makes more sense that they called and that is not un-heard of a company getting peeved at old agents replacing their biz.

I agree about not involving clients in the process but come on this is controlled business.
If you know they dont like what your doing you why rock the boat when you dont have to (not that your doing anything wrong IMO) .

What if next week you run into to a 500k transfer from NYL your gonna wish you were'nt in a pissing match with them last week (little exaggerated but you get the point).

 

[Norwayguy]

New IRS regulations in regards to 403(b)s went into effect January 1st 2009. The district must now have a written plan document. To transfer (which is incorrect term) correct term to rollover a 403(b) into an IRA a triggering event must occur either Attained age of 59 1/2 or seperation of service from that district. Disability and death are also triggering events but not for rollover.

The school district may or may not have hired a TPA...however from your post it sounds like the school has moved to a 401K program. The school could have done 2 things at that time

1. Terminated the plan in which case the assets must have been removed from the 403(b) program and moved within a time period which I believe was 1 year.
2. Stopped allowing contributions to the 403(b) when they started the 401K and if it was ten years ago there really was no regulations covering the 403(b) however the IRS has been pushing these new regs since about 2005 and finally they where implemented 1/1/2009

Okay about your mother assuming she no longer works for the district or is 59 1/2 then in most cases the insurance company will accept a letter written on school district stationary stating who in the district is authorized signer for the plan (Side note most Insurance Companies will not allow whats called self certification example Superindent signs letter stating he is the authorized signer will normally not fly if that is the case normally 2 officers of the district Super and Business manager sign letter) And then you have that authorized signer sign the distribution form.

If the school hired a TPA you will need to contact the TPA and find out what they require.

I've been moving my book from a 403(b) base because I can see the writing on the wall for small 403(b) professionals you can call me about this and we can see whats available for your client.

I can be reached on my cell 207-740-0827
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It shouldn't require the signatures and she was out of line to call. If it is Valic, she can look at her account online and find out the name and number of her "financial planner". I would call that person and tell them what has happened and tell them you are going to file a complaint with the state and the school district. I would also follow up on that threat.

Good luck!

Your out of date in regards to 403(b) regs.
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403bs in a school district can be rolled in to an IRA at any time (while the person is working or not). No triggering event required. This woman either doesn't know what she's talking about or she's blowing smoke.

Hope this helps.

This info is not correct under the old rules or the new rules....Under the old rules it was possible to 90-24 transfer a 403(b) into a new 403(b) and since you could self certify it acted like an IRA but was still a 403(B) you could only go from 403(b) to another vehicle upon triggering even seperation from service, attained age of 59 1/2, death and disability.

Under the new rules 90-24 transfers have gone away and the plan document rules. If your client wants to transfer from 1 403(b) to another the receiving 403(b) must be listed as an approved product on that districts plan document and be signed off on by either the TPA or school.