Author Topic: 403(b) rollover after merger/acquistion  (Read 364 times)

153

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403(b) rollover after merger/acquistion
« on: December 20, 2019, 09:53:06 AM »
Here's the scenario: I used to work for Chocolate Llamas company, and had a 403(b) with them. They were acquired by Academic Chocolate Alpacas, and 2 weeks after the acquisition, I transferred from the Chocolate Llamas office to Academic Chocolate Alpacas HQ, and a new corporate division. I'm now participating (and maxing, obviously) in the ACA 403(b) plan, but want to rollover my Llamas 403(b) [and 401(a)] into the ACA 403(b).

How would I find out whether I'm allowed to make this rollover? I'm unclear on whether the merger complicates my separation status.

Thanks!

dandarc

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Re: 403(b) rollover after merger/acquistion
« Reply #1 on: December 20, 2019, 09:55:24 AM »
Ask HR. Or read the plans' documents.

terran

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Re: 403(b) rollover after merger/acquistion
« Reply #2 on: December 20, 2019, 12:29:34 PM »
Ask HR. Or read the plans' documents.

Or talk to the plan administrator (Fidelity, TIAA, etc).

ChpBstrd

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Re: 403(b) rollover after merger/acquistion
« Reply #3 on: December 25, 2019, 08:15:38 AM »
Generally, 401k and 403b administrators are enthusiastic about helping you roll over your account from your previous employer. It's more money for them to manage and skim fees from. Also, sometimes the administrator of the old plan will come forward and offer you the chance to stay with their high-fee plan.

The better question is how to get your money out of employer-sponsored 401k/403b plans without triggering early withdrawal penalties? You'd like to roll these accounts into a brokerage IRA so that you can avoid the high fund fees and have more choices. Usually, you can only do this upon termination of employment. I'd call the administrator of your old plan to ask if the merger is an event which would allow you to roll into your brokerage account.

terran

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Re: 403(b) rollover after merger/acquistion
« Reply #4 on: December 25, 2019, 08:32:27 AM »
Generally, 401k and 403b administrators are enthusiastic about helping you roll over your account from your previous employer. It's more money for them to manage and skim fees from. Also, sometimes the administrator of the old plan will come forward and offer you the chance to stay with their high-fee plan.

The better question is how to get your money out of employer-sponsored 401k/403b plans without triggering early withdrawal penalties? You'd like to roll these accounts into a brokerage IRA so that you can avoid the high fund fees and have more choices. Usually, you can only do this upon termination of employment. I'd call the administrator of your old plan to ask if the merger is an event which would allow you to roll into your brokerage account.

This is not universally true. At large employers you often have no plan fees and access to index funds with lower expense ratios than what's available on the open market for the same fund thanks to things like Vanguard's institutional class funds with $10M minimums. If you might want to make backdoor Roth IRA contributions it's preferable to keep your tax deferred investments in your 401(k)/403(b) instead of rolling them over into an IRA.

Also definitely don't ask about rolling over to your brokerage account. If anything ask about rolling over to your IRA. I think this is what you meant given prior sentences, but your final sentence would lead to a large taxable event and the loss of continued tax deferred growth.