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detailgal

Transfers: What's Allowed?

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Hello All,

 

Well, after a couple of years of plugging away, it looks like my non-profit agency is going to get a new "open architechture" plan. It isn't the Vanguard deal I wanted, but I can swallow it much better than the ING Erisa Annuity with the 1.25% wrap, 10 year surrender charge period and should-be-illegal level of lousy customer service. But I digress. Here's the situation and questions:

 

The ING plan will either be frozen or terminated depending upon a few factors (outstanding employee loans, if the agency can afford to pay off the surrender fees etc.) The ING rep says that if we leave ING, the employees can transfer all their money, from both the employee and employer accounts to the new plan. Now, this totally contradicts what I've been told in the past by ING and here. So I'm wondering: Is he out and out wrong? Would that be true if it were NOT an Erisa plan and he has overlooked this? Is there a different rule if the plan is terminated vs. frozen?

 

Based upon "valuable," but painful experience, I do not trust ING to know what they're doing or give the right answer the first 10 times I ask. So, I'm here. Thanks for your help on this.

 

detailgal

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Nope, they are right. Assuming the new contracts read right ( which they almost certainly will), this is terated as a nontaxable like kind exchange of one annuity for another. That's true whether the accounts are annuities or not.

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