I have a client that wants her 401K out of the market. Sent transfer forms 3 weeks ago. The company refuses to talk with the new company and has not even acknowledged that they have the transfer forms. I called them and was told, do to the privacy laws they are not able to talk to me or the new company, they will only talk to the client. Is this common?
- 11,457
Wow. Where do we start?
1) Is this 401k with a current or previous employer? You can't rollover or "direct transfer" a 401k from a current employer unless they are eligible for an in-service distribution.
2) Calling on someone's 401k account is like calling on any other private account. No one is going to give you ANY information - other than general information like "what is your address" - because it is a PRIVATE account. It's like calling the bank and asking for my balances. It's none of your business. If you need information, you should do a 3-way conference call to the plan sponsor with the client on the line. Let them identify the client and have the client give permission to share information with you.
1) Is this 401k with a current or previous employer? You can't rollover or "direct transfer" a 401k from a current employer unless they are eligible for an in-service distribution.
2) Calling on someone's 401k account is like calling on any other private account. No one is going to give you ANY information - other than general information like "what is your address" - because it is a PRIVATE account. It's like calling the bank and asking for my balances. It's none of your business. If you need information, you should do a 3-way conference call to the plan sponsor with the client on the line. Let them identify the client and have the client give permission to share information with you.
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- 10,704
As DHK said, if its her current 401k then she most likely cant move the funds (unless she is over age 60 and the plan allows it).
If it is a former job, then she can move it. However, many 401k plans do not accept 3rd party transfer forms. The client must contact the Plan Administrator or the former employers HR department to get the form that the Plan requires. Some Plans will require a signature guarantee on the form as well.
They are not going to talk to you without the clients consent. Do a 3 way call and have the client tell them to talk to you about the transfer. You also can sometimes just ask general questions about the transfer requirements. That is not privileged info. But try not to start the convo with "im an agent trying to check on the transfer to the annuity I sold".
- Thread starter
- #4
I did not give enough information last time. The client is retired from her job and she is 64. She is 100% vested and free to move the money. Our problem is the company that has her 401K will not even communicate with the new company that they even have the transfer papers.
Before I submitted the app I called the company with the 401K, to see if they had forms that they require to be completed. they did and those were submitted along with the application.
I know they can't tell me any information and yes we have a 3 way call scheduled. My question was have you ever heard of a company not even acknowledging that they have the papers to do a transfer.
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- 11,457
Ok. Sounds much better.
You still have to complete THEIR distribution paperwork and acknowledge that she has read the IRS Special Tax Notice regarding plan distributions. It will be in their paperwork that you tell the company who to make the distribution check payable to.
You still have to complete THEIR distribution paperwork and acknowledge that she has read the IRS Special Tax Notice regarding plan distributions. It will be in their paperwork that you tell the company who to make the distribution check payable to.
- 10,704
They will not acknowledge anything to you or anyone else without the client's consent first. It is very likely that they required a signature guarantee or something like that. 401k transfers usually are pretty quick once the paperwork is in order.
- Thread starter
- #7
I asked them that and they said no. There is no form they will accept allowing the new company to talk to them
- 10,704
I didnt say there is a form. You do a conference call with the client and company and find out what the hold up is. Each company has their own rules surrounding transfers and privacy. Some companies can be a real PIA, but often it is just something simple that is off... like a signature guarantee... or the funds have to be in cash before they will transfer... or the client has to give verbal confirmation.... etc. etc. etc.
Everything at this point is just guesswork. And this is totally normal for them to not give you info without the client being on the line as well. Often I will call the company with the client before we even do the app. Welcome to annuity sales.
Its your clients $... from what you said, she's free to do with it what she wants at this point. Have her take control of the situation and find out what needs to be done to move the $ to where she wants. As mentioned, a 3 way call would be a good idea.
The only issues I've ever run into are with the companies like EJ, etc... they seem to make the client jump through lots of hoops. It seems like they intentionally make it hard hoping the client gets frustrated and says "forget it, I'll just leave it where it is". Not always the case, but I've seen some really odd stuff at times. I'm sure that is not the case here... as its a previous employer.
The only issues I've ever run into are with the companies like EJ, etc... they seem to make the client jump through lots of hoops. It seems like they intentionally make it hard hoping the client gets frustrated and says "forget it, I'll just leave it where it is". Not always the case, but I've seen some really odd stuff at times. I'm sure that is not the case here... as its a previous employer.
- 6,969
(comments here only from personal experience of LD )
Before the conference call (bear with me a couple of minutes sca--) I would check one other thing.
In the company I used to work for, in a previous 401k structure they had the following pieces. (I am just going to give descriptions-my eyes glazed with the technical names and I can't remember them)
In the employer company-the plan administrator-in our case the CFO.
Outside the employer company "in the money"
A company that handled all the records of the employees-who was eligible-when eligible-accepted/declined and so on. They also had a record of the amounts each employee had in the plan and the vesting %'s.
Then there was a second company that did the investment advising. They had somebody come to the employer company quarterly or semiannually and talk about the importance of saving for retirement-etc. some of the investment options involved using them to manage your money.
Then there was a third company-I think it was Charles Schwab-that actually warehoused the money.
All three of those companies got "cuts" of MY money somewhere along the line. (nasty aside-I noticed that they ALWAYS got "theirs" regardless of whether or not the market provided me "mine".
)
Anyway-in that particular plan management structure-the plan administrator had to approve ALL changes relating to employees and their balances. The employer company often had employees that would communicate with the "away from the employer"-"out of town office" of the company that kept the records asking for loans, partial distributions, post separation distributions, etc. In our case the record keeping company would acknowledge the receipt of those inquires to the employee/former employee, but the paperwork would always come back to our office for the CFO's (as plan administrator's) signature before the record keeping company could do anything.
(And, at least in a relatively small plan, the plan administrator may actually welcome the distribution because it is a PIA to meet all of the required report distributions to a "far flung" group of former employees.)
I am learning-to my dismay-that many things about retirement and it's financial issues are not simple, but it is (remotely?) possible that the solution to your situation may be to find out who/where the plan administrator is and have your client provide another set of (current) plan forms directly to the plan administrator requesting distribution to the new place you want the money to go to. (In our case at least, when stuff came into the employer company's office to the plan administrator-and it involved distributions-it was processed and passed on promptly. )
Sorry about the length of the post-didn't know how to convey the idea more concisely because I don't know what is important and what isn't.
LD
Before the conference call (bear with me a couple of minutes sca--) I would check one other thing.
In the company I used to work for, in a previous 401k structure they had the following pieces. (I am just going to give descriptions-my eyes glazed with the technical names and I can't remember them)
In the employer company-the plan administrator-in our case the CFO.
Outside the employer company "in the money"
A company that handled all the records of the employees-who was eligible-when eligible-accepted/declined and so on. They also had a record of the amounts each employee had in the plan and the vesting %'s.
Then there was a second company that did the investment advising. They had somebody come to the employer company quarterly or semiannually and talk about the importance of saving for retirement-etc. some of the investment options involved using them to manage your money.
Then there was a third company-I think it was Charles Schwab-that actually warehoused the money.
All three of those companies got "cuts" of MY money somewhere along the line. (nasty aside-I noticed that they ALWAYS got "theirs" regardless of whether or not the market provided me "mine".
)Anyway-in that particular plan management structure-the plan administrator had to approve ALL changes relating to employees and their balances. The employer company often had employees that would communicate with the "away from the employer"-"out of town office" of the company that kept the records asking for loans, partial distributions, post separation distributions, etc. In our case the record keeping company would acknowledge the receipt of those inquires to the employee/former employee, but the paperwork would always come back to our office for the CFO's (as plan administrator's) signature before the record keeping company could do anything.
(And, at least in a relatively small plan, the plan administrator may actually welcome the distribution because it is a PIA to meet all of the required report distributions to a "far flung" group of former employees.)
I am learning-to my dismay-that many things about retirement and it's financial issues are not simple, but it is (remotely?) possible that the solution to your situation may be to find out who/where the plan administrator is and have your client provide another set of (current) plan forms directly to the plan administrator requesting distribution to the new place you want the money to go to. (In our case at least, when stuff came into the employer company's office to the plan administrator-and it involved distributions-it was processed and passed on promptly. )
Sorry about the length of the post-didn't know how to convey the idea more concisely because I don't know what is important and what isn't.
LD
