401(k) Plan rollover
Hello,
I have a client for whom we are trying to roll over a previous employer’s 401(k) Plan on a direct rollover basis via a trustee-to-trustee transfer from the previous custodian (Fidelity) to the new custodian (TD Ameritrade).
She is being informed that Fidelity will make the check payable to ‘TD Ameritrade FBO Client’s Name’; however, they will only mail the check to her.
I’ve never had a problem with custodians in performing trustee-to-trustee transfers. In this instance, provided the funds are deposited by her into her Rollover IRA with TD Ameritrade within 60 days, I assume there will not be any issue in terms of this being considered a full distribution.
Please confirm the above as I have heard of custodians mailing checks to clients for deposit but have never had to deal with this before now. Thank you. Jason
Permalink Submitted by Alan - IRA critic on Sat, 2014-03-08 04:26
This is the routine procedure for many employer plans. As long as the check is made out to the new custodian and not to the client, this is still a direct rollover with no mandatory withholding. Client just needs to forward the check on to TD Ameritrade. The 1099R will show code G in Box 7 denoting a direct rollover.