How do I rollover a 403(b) retirement account into an IRA?
I'm trying to rollover a 403(b) retirement account into an IRA. According to the company I'd like to begin an IRA with, I simply need to contact my 403(b) company and tell them where to send the check. However, my 403(b) company appears to be putting up a struggle to hold onto my money. They will not release my money until I return a lengthy document with appropriate initials and signatures. One of those signatures, according to them, must be from my previous employer, stating that I do not work there anymore. This is a bit inconvenient, since my previous employer is approximately 1,000 miles away.
I'm confused on this, since both companies have told me different things. What should I do to resolve this problem?
I'm sorry you are having these difficulties.
403(b) p[lans are weird animals, especially non-ERISA plans (typically used in schools). In their attempt to protect against fraud sometimes doing anything can be onerous.
Like 401(k) plans, each plan has their own rules as to what is needed to roll money out of he plan to an IRA. Many 401(k) plans will accept phone instructions, and will not accept paper requests. Others will only accept paper requests. Still others will only accept web site requests. The employer sets the requirements, but of course the the sponsor provides 'guidance'. In one rollover I initiated, the plan required the signature of someone at the district office who took a six week ummer vacation, and of course, there was no one else authorised to sign the papers to approve the request
Here is a suggested plan of action:
- Contact your previous employer
- Find out who the authorized person is
- Talk to the person to let them know what you are trying to accomplish
- Have your new form send the paper work to that person WITH a self addressed stamped envelope. (I NEVER send any paperwork to anyone (especially clients) without a courtesy stamped return envelope.)
- Send it to them, with one of those little "Sign Here" flag(s) placed in the appropriate places
- Follow up in seven business days to make sure it was received, or to have the person go through their inbox
The key here is to make it easy for the person to do what you need them to do. I realize they should do it, but if this is a school district or other academic office, many of them are understaffed (especially now) and they are trying to get ready for the next academic season.
I personally just helped a client to rollover his 403b plan, which he left 25 years ago, to his new IRA. Yes, the document did ask for the “date of separation” and must be signed by the previous employer. Left to my client to finish, he probably would have waited another 25 years. Honestly, no one has the time to deal with the lengthy process, so the majority of the people choose the alternative—leave behind several retirement accounts around while they move from job to job.
Sounds like you have the determination to start the consolidation process but just have no clue on how to go about it. If you have a financial planner, he/she can help you get it done easily with the least effort from you since all of us do it almost on a daily basis. Alternatively, you must peruse the entire document and dot your I’s and cross your t’s. Otherwise, an incomplete document will further delay the rollover. As for obtaining your previous employer’s signature, call the HR to give them the heads-up, then follow up diligently. It will get it done albeit it takes a longer time. Be patient with yourself and the process. Best!
That certainly is frustrating. You no question should be allowed to roll those dollars into your IRA if no longer employed. 403(b)'s can some times have more red tape than a typical 401(k). They're likely is a form as you suggest that you'll need signed with directions of what to do and fill out with the appropriate signature. Quite honestly I would think your advisor and institution taking over these funds should be holding your hand through this process. That said there is likely a contact person and number at the old institution who handles the plan administration. This person should know exactly what to do. Most of the times just getting the forms into the hands of the old investment co will allow them to act on your behalf. Short of that just contact them or have your advisor do the heavy lifting for you.
Sometimes it is as easy as contacting the 403(b) company to tell them where to send the check, but not usually. What the 403(b) company is telling you is pretty standard procedure for withdrawing funds from your previous employer's plan. Since the previous employer is so far away, this process will likely take a while since you'll be mailing forms back and forth. But your previous employer is probably used to the procedures for signing off on the forms. You should follow the instructions of the 403(b) company since they are the ones holding your funds and you'll have to follow their procedures to get it out and roll it into the IRA. Best of luck!
Dear 403(b) owner,
Due to the IRS changes on 403(b) accts the fudicuary responsiblity is on your old employer. You should have the qualified transfer form the IRA co send to the old employer. They will indeed need to verify that you are no longer employed, and sign off on it as well.
Once this is good order, the 403(b) can be transfered direct to the IRA. There is no way to get around this! Also, make sure you do this correct, becasue a direct rollover shouldnt ever touch your hands. It should go from trustee to trustee.
We do this type of work everyday, and we highly recommend you work with a financial professional to make sure its a smooth transfer. You get no do-overs from the IRS if it gets messed up. Fee free to call us today, we would be happy to help!
Brett M. Sause,LUTCF®, LTCP®, CLTC®, RFC®, LACP®, FSCP®
Principal & CEO
AtlanticFinancialGroup.org* 401(k) Rollovers * Retirement * Long Term Care * Estate Planning * Charitable Giving
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