Author Topic: Transferring 401k from current employer  (Read 3766 times)

apdale

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Transferring 401k from current employer
« on: March 08, 2016, 06:54:14 AM »

My wife has 401k accounts at 3 different institutions from her current employer due to us moving to options with lower and then again lower fees and more flexibility.  Can you transfer a 401k from one institution to another while still employed with the same employer?  If she moved to a different job, we would rollover all of them into an IRA at Vanguard, but the available options while employed with the same employer are less clear to me.  If it matters she works for a school system and is a Federal Employee.  She is now also contributing to a 457 as well as a 401k.  Also, I'm not positive if the accounts are 403b or 401ks, nor do I know if that affects the rules on transferring the money.

So my questions are:  it allowable to transfer a 401k to Vanguard?  If so, would that be a conversion to a IRA or would it stay a 401k?  Is it allowable to transfer the 401k to the institution we are happy with (still higher fees than vanguard) but much better than the institutions they are with now (Capital One and Franklin Templeton).  If so, would that be transferring it as a 401k or would that be as a conversion to a IRA?

Any help would be appreciated.

lthenderson

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Re: Transferring 401k from current employer
« Reply #1 on: March 08, 2016, 07:46:51 AM »
It depends on your company's plan. They don't have to allow rollovers while you are currently employed there but many companies do. Personally if allowed by your company, I would roll them all over to a Vanguard IRA where you have full control of how they are invested and low fees.

katsiki

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Re: Transferring 401k from current employer
« Reply #2 on: March 08, 2016, 07:50:07 AM »
I have a related question.  How do you normally find out if this is allowed?  I have seen it mentioned to read the summary plan description which I did.  However, it does not say one way or the other - it uses a lot of "may" and other weasel words.  Do I call the financial rep or provider?

Hopefully, this helps the OP too.  Sorry to hijack your thread!  :)

apdale

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Re: Transferring 401k from current employer
« Reply #3 on: March 08, 2016, 07:51:48 AM »
It depends on your company's plan. They don't have to allow rollovers while you are currently employed there but many companies do. Personally if allowed by your company, I would roll them all over to a Vanguard IRA where you have full control of how they are invested and low fees.

OK, so everything is company specific then.  For some reason I thought there were rules against rolling over a 401k into an IRA while still employed, if that isn't the case I will work on verifying the available of this option and hopefully then transferring the funds to Vanguard.

lthenderson

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Re: Transferring 401k from current employer
« Reply #4 on: March 08, 2016, 08:06:20 AM »
I have a related question.  How do you normally find out if this is allowed?  I have seen it mentioned to read the summary plan description which I did.  However, it does not say one way or the other - it uses a lot of "may" and other weasel words.  Do I call the financial rep or provider?

I would talk to the company plan manager. In most of the smallish companies I worked at, this was the director of Human Resources but I would guess bigger outfits might have a separate manager, especially one that has changed providers several times.

Dee18

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Re: Transferring 401k from current employer
« Reply #5 on: March 08, 2016, 11:03:00 AM »
I rolled my old employer account over to Vanguard.  It was quite easy and Vanguard guided the process.  However, I wish I had not done it when I did.  Why?  Because I have about 25,000 in Traditional IRAs that i should have converted to Roth before moving my 200,000+ employer account.  If you are planning on doing any traditional to Roth IRAs, think that part through before moving the other money.

apdale

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Re: Transferring 401k from current employer
« Reply #6 on: March 08, 2016, 11:06:59 AM »
I rolled my old employer account over to Vanguard.  It was quite easy and Vanguard guided the process.  However, I wish I had not done it when I did.  Why?  Because I have about 25,000 in Traditional IRAs that i should have converted to Roth before moving my 200,000+ employer account.  If you are planning on doing any traditional to Roth IRAs, think that part through before moving the other money.

Is this only an issue if the contributions to the tIRA were Non deductible or does that include deductible tIRA funds also? 

sonjak

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