Transfers Vs. Rollovers. From A Credit Union That I Have Maturing Roth IRA's With--

Ally6770 | Apr 6, 2015 | 4,290 posts since 2010

As for the transfer inquiry, I've confirmed with our IRA processor that you would be able to mail out your IRA transfer yourself as long as the check is made payable to the receiving institution. She stated that it is a grey area and that we should make it very clear to the other institution that it is a transfer and not a rollover. I'll go ahead and make your transfer in April (the 15th to be exact) and we can discuss the ones going forward.

Does anyone know the rules?

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Answers

Anon456 | Apr 7, 2015 | 249 posts since 2011

I am not an expert, but I have probably done 30 transfers over the years. Here is one thing I have heard that makes sense. The transfer instructions MUST come from the new receiving organization with transfer forms and THEIR signature to authorize the transfer, AND that they will be accepting the funds as an IRA and as a trustee. IF you initiate the instructions without those forms, how does the sending company KNOW that it is being transferred to another IRA. YES - you can instruct the current company to make the transfer, but the back office MAY code this as a distribution. BEST to only provide the receiving firm with your instructions and signature, and have them contact the current company adding their original signatures. That way there should be no doubt, and you even have proof to show the IRS if either company codes it wrong.

Ally6770 | Apr 7, 2015 | 4,290 posts since 2010

Thanks. The transfer this month will be my third this year. Until this year, I have always had checks made out to the receiving institution FBO of myself and overnighted or hand delivered the check. In the past it was always considered a transfer and not a rollover. This always allowed the transaction to be completed the same day or no more than 2 days if overnighted. One of the transfers this year took 9 days and I was a little upset because of the time taken. The receiving institution said that actually it was quite quick that many taken from several weeks and up to two months. The next IRA due later this year is a very large one and I have no intention of missing out on a week or two in interest. I will either get it done with an overnight mail from the sending institution or I will have to have it considered a rollover. The one thing I have learned this year is the the institution requesting the IRA will send the request by fax if the sending institution agrees. The two institutions I have dealt with this year agreed to doing that. This way I know when the fax was sent and received as I requested to be notified and I can watch for the account being zeroed out on the day the CD matures.
I think I will copy and paste what the credit union has emailed and send it to NCUA. In the past NCUA has been most responsive to a request.

paoli2 | Apr 7, 2015 | 2,641 posts since 2011

I did a transfer just last year as per the information in Anon456's post and received copies of the transfer forms for my records for proof. I also wanted to make sure the info on the forms was correct and done according to IRS rules. Everything went smoothly. No matter what your IRA processor informed you, I would not want to mail it out myself to avoid misunderstandings by the other institution.

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