Simple IRA Custodian Change for Plan Sponsor

Submitted by Jonathan Sard on Tue, 2022-10-25 19:54

Do you know if an employer (plan sponsor) can change custodians of their company Simple IRA at any time during the year, or can they only change custodians by giving 60 days notice by November 2nd for a January 1st effective date? The plan wants to move its Simple IRA from Franklin Templeton to TD Ameritrade. Thank you!



Submitted by Alan - IRA critic on Thu, 2022-10-27 02:59

Notice 98-4 does not address this question, but because of the IRA custodian reporting requirements, an interyear change would require a complete transfer of data to the new custodian. As such, it is likely that most new custodians would only agree to assume responsibility  from a prior custodian effective Jan 1. Is this a case where the employer was not able to change custodians by the 11/2 deadline for the annual notification to employees?

Submitted by Jonathan Sard on Tue, 2022-11-01 20:17

Correct, the employer was not able to make a decision and notify his employees in time. However, my understanding is that only the notification has to be made by 11/2 but that the employer has until 1/1 to change custodians. Am I mistaken?

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