Simple IRA Transfers
If a person separates from their employer and they are not out of the 2 year holding penalty, they have to transfer to another simple ira or leave the account where it is to avoid the 25% penalty…the question is, if a person is still unemployed but does not want to keep their simple with the current trustee, how does one establish a simple IRA without the Employer/Employee agreement, the person wants a different firm to act as trustee.
Permalink Submitted by Denise Appleby on Wed, 2009-04-01 23:30
[quote=”cfs-rstone”]If a person separates from their employer and they are not out of the 2 year holding penalty, they have to transfer to another simple ira or leave the account where it is to avoid the 25% penalty…the question is, if a person is still unemployed but does not want to keep their simple with the current trustee, how does one establish a simple IRA without the Employer/Employee agreement, the person wants a different firm to act as trustee.[/quote]
It cannot ( should not) be done without the employer’s SIMPLE IRA agreement.
The employer should ask the employer for a copy of the SIMPLE Agreement, and present it to his new custodian/trustee. He would complete the new custodian’s SIMPLE IRA adoption agreement, which would be paired with his employer’s SIMPLE agreement. The custodian may require that the employer sign some form of acknowledgement.
Once the account has been established, the transfer can be completed.