401K – Bad Data
We have a client that has an old 401K at Fidelity with about $350,000 in it. On Fidelity’s website it shows after tax (Pre 87 and Post 86) as well as company match, ESOP and pre tax sources. When we call Fidelity to roll over the 401K they tell us that only post 86 has any basis (all the rest of the post tax is just gain). When we ask them to verify this information they can’t do it.
The 401K plan was moved to Fidelity back in the 80’s from Mellon Bank and the client went on disability from the company so he didn’t make any contributions to the plan at Fidelity. We asked Fidelity to research and verify the data they show on the website. The big question I had was why does the website show an after tax pre87 source but it doesn’t show any basis for contributions. They were able to generate 42 pages of data of which much they say was not readable. They won’t change any of there data and are sticking with the original findings even though they can’t show how they came up with the data.
The client remembers making a lot of Post Tax contributions to his 401K and would like this information verified. Fidelity is telling us that they can’t do anything more.
Who is ultimately responsible for the accuracy of the data? Can the client do anything to get this data verified? Other suggestions for next steps?
Permalink Submitted by Alan Spross on Thu, 2012-05-10 19:36
Mellon was responsible for accuracy of the data when the accounts were transferred to Fidelity, and then Fidelity is responsible for changes after that.
The client would have a simpler path if they maintained some of the older statements, particularly any from Mellon. If client has never taken any distributions, any after tax contributions made are still valid. Pre 87 such contributions must be specifically accounted for to maintain the pre 87 benefit of exemption from the pro rate rules. All the client really needs is one such statement that will give him credibility to push Fidelity to restore the correct breakdown.
Client needs to establish two things:
1) The correct total basis
2) The amount of that basis that was pre 87
Permalink Submitted by Sean Phillips on Thu, 2012-05-10 21:25
The client did not keep any of his old statements from Mellon. Is there a way to go back and get that data? Supposedly Fidelity got a bunch of data from Mellon but most of it not legible. Is Mellon responsible for providing it even after 20 years later? Is there some kind of timeframe where they are not responsible anymore?
Permalink Submitted by Alan Spross on Thu, 2012-05-10 22:00
If client cannot get satisfaction from Fidelity with respect to the information they received from Mellon, perhaps they can get assistance from the DOL:
http://www.dol.gov/dol/contact/
Note that client may have to pay a fee to get Fidelity and/or Mellon to research this problem in greated depth.