401k rollover turned into a fumble.
January 14, 2016 7:19 PM Subscribe
I did not get all of the proper rollover documentation to the new bank within the 60 day window for processing a rollover (I filled out the form incorrectly). The new bank rejected the funds from the old bank, but the account was already closed at the old bank. This is where the trouble begins.
The money is now in the form of the check from the new bank to the old bank. The new bank says it can't process the rollover unless the old bank takes its money back and issues a new check (with all of the proper paperwork in place now). The old bank says the account is closed and that the new bank has its money. The old bank have sent the check from the new bank to me directly.
Between their slow response times, the new bank sending the check to my home address, and major other life things, this has been going on for a year and a half. I've had the stale check reissued. The 1099 from came from the old bank and already paid the taxes on it last year. So far I've been talking to both banks on the phone and sending letters/forms/etc. by mail.
Dear AskMefi, how can I get this money into an account somewhere? I think the old bank is the problem, but I don't know enough about this to be sure--and even if they are, I don't know how to make them take the money back.
The money is now in the form of the check from the new bank to the old bank. The new bank says it can't process the rollover unless the old bank takes its money back and issues a new check (with all of the proper paperwork in place now). The old bank says the account is closed and that the new bank has its money. The old bank have sent the check from the new bank to me directly.
Between their slow response times, the new bank sending the check to my home address, and major other life things, this has been going on for a year and a half. I've had the stale check reissued. The 1099 from came from the old bank and already paid the taxes on it last year. So far I've been talking to both banks on the phone and sending letters/forms/etc. by mail.
Dear AskMefi, how can I get this money into an account somewhere? I think the old bank is the problem, but I don't know enough about this to be sure--and even if they are, I don't know how to make them take the money back.
Response by poster: To clarify: The check I have is payable to the old broker, not to me directly. Do I tell the new broker to make it out to me instead?
posted by mrcrow at 7:54 PM on January 14, 2016
posted by mrcrow at 7:54 PM on January 14, 2016
The old broker made a check payable to itself? That is exceptionally odd. It's also wrong - even if this was a rollover.
The check should be made out to you, since the money is now your's, as post-tax-paid money. At this point, the new broker cannot accept any check (either a check made out to you or a check made out the the new broker). 401(k) contributions have to come from payroll deductions. You'll have to cash the check yourself, to your own checking account, and then wait for payroll deductions to fill up your new 401(k).
posted by saeculorum at 7:59 PM on January 14, 2016
The check should be made out to you, since the money is now your's, as post-tax-paid money. At this point, the new broker cannot accept any check (either a check made out to you or a check made out the the new broker). 401(k) contributions have to come from payroll deductions. You'll have to cash the check yourself, to your own checking account, and then wait for payroll deductions to fill up your new 401(k).
posted by saeculorum at 7:59 PM on January 14, 2016
Best answer: Ah, I missed the first paragraph of your original post. As I said, I was missing something.
Yes, your new 401(k) broker screwed up here. The check should be written out to you, since it is no longer a rollover, it is a non-qualified distribution to you. Your old 401(k) broker is correctly indicating that they are not part of this transaction and are correctly refusing to do anything about it.
posted by saeculorum at 8:11 PM on January 14, 2016
Yes, your new 401(k) broker screwed up here. The check should be written out to you, since it is no longer a rollover, it is a non-qualified distribution to you. Your old 401(k) broker is correctly indicating that they are not part of this transaction and are correctly refusing to do anything about it.
posted by saeculorum at 8:11 PM on January 14, 2016
Response by poster: saeculorum, you have given me hope to face the customer service gauntlet again!
posted by mrcrow at 9:43 PM on January 14, 2016
posted by mrcrow at 9:43 PM on January 14, 2016
I'm confused - who was the original check made out to?
posted by Candleman at 7:38 AM on January 15, 2016
posted by Candleman at 7:38 AM on January 15, 2016
This thread is closed to new comments.
Since you are over 60 days since the original check was written to you, this money is now an unqualified distribution - in other words, a check directly to you. It is no longer a rollover. It is literally cash that you own (which you paid taxes on). You should have a check, made out to you, for that amount. If you don't have that check, made out to you, then the problem is your previous 401(k) broker. They should be able to write that check to you, multiple times, although they may charge you to put a stop payment on previous checks they say they've written.
If you have that check, and it is dated within the last six months, then your bank should cash it - it is a valid check. That said, it has to go to your bank - not to the new 401(k) broker. The new 401(k) broker should no longer be viewing this as a rollover, and should not be involved in this transaction. 401(k) contributions have to either come from rollovers (not an option anymore) or your paycheck. So, you can put the check into your checking account, then set your 401(k) contribution amount to 100% (or as high as it will go), then live off your checking account for the amount of time it takes to fill up your 401(k) again.
If you have that check, and it is dated older than the last six months, you should be able to have the old 401(k) broker write you a new check. They may either request you send back the old check or charge you to put a stop payment on your old check. Again, they should not care anything at all about the new 401(k) broker at this point - the check is to you, not the new 401(k) broker. All they should care about is that you have not cashed the check, which can be demonstrated by either returning the check or putting a stop payment on it.
posted by saeculorum at 7:36 PM on January 14, 2016 [1 favorite]