Employer Plan Provider Won’t Accept Check from IRA

Submitted by Betsy Ratashak-Vogel on Thu, 2020-09-10 19:18

Attempting to move funds from IRA to 401(k).
1) Check made to 401(k) provider FBO individual.
2) 401(k) Plan won’t accept check because former IRA custodian won’t provide required paperwork.
3) Electronic access to IRA accounts was terminated resulting in no access to a month-end statement.

In fear of the 60-day rollover deadline, what’s the next move?



Submitted by Alan - IRA critic on Thu, 2020-09-10 21:48

What info does the plan require? Usually, a plan will require the taxpayer to certify that no IRA basis is included in the rollover, or possibly they require that the IRA account must be a rollover IRA. It is not typical to require info from the IRA custodian, but it’s possible. If this cannot be resolved, the check should be returned by the 401k plan to the IRA custodian with an explanation why it was not accepted. There is no 60 day limit for direct rollovers, only for indirect rollovers, and this was a direct rollover check. Nonetheless, the participant should attempt to get this resolved ASAP, and will probably have to call each plan because the plans will generally not want to work things out directly between them.   

Submitted by David Mertz on Thu, 2020-09-10 22:16

  • See the following IRS web page on the subject of qualified retirement plans accepting rollovers from IRAs:
  • https://www.irs.gov/retirement-plans/verifying-rollover-contributions-to-plans
  • Information provided to the plan by the participant *should* be sufficient under these guidelines, particularly if the check identifies the payer as the IRA that distributed the funds.  In the absence of that, it seems that a copy of a transaction statement from the IRA custodian should be a suitable substitute.

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