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rhollowood

Another 403B Gone Wrong Song...

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Got approval from TSA Consulting Group and Fidelity. Now Ameriprise is telling me that they can't accept it because they only take their own paperwork, not Fidelity's. 15 days for the first real hitch. They also tried to pitch me to stay for the guaranteed 3% interest rate feature since my contract is so old and I have that baked in. The rep said he'd email the paperwork I need when I said I still wanted to move forward with the contract exchange but that email has mysteriously not shown up thus far.

 

Rhollowood,

You may want to consider keeping a portion in that guaranteed 3% interest account if there aren't heavy fees associated with that particular account. I have that with AXA and I'm actually thinking of keeping the conservative portion of my portfolio there, when I transfer the rest of it out. I'm told there aren't M&E charges or other fees. Not sure about Ameriprise.

 

Don't count on the email, lie Mark said. I searched for transfer forms on Ameriprise's website when my forms didn't arrive. And at the same time, ask them to paper mail forms too.

 

Congratulations on making progress! I'd talk to the rep again and tell them their email got lost in the ether, and ask for the forms again. If you keep pestering them, you might motivate them to do their job. You could also tell Fidelity that Ameriprise won't email you the forms.

 

Yes, Fidelity, like Vanguard, like to hear that data about the other companies. It helps them help you, believe it or not. They kept notes on what I told them was happening at Ameriprise and I never had to repeat myself. They were on top of my transfer requests and helped me with verbiage.

 

Actually, the reps job appears to be to make it difficult for you. From my very recent experience transferring 5 Roth IRA's out, they omit details and use different names for products. It took about 3 months from start to finish!!

 

Let us know how you progress. It's like nothing else. Certainly not like Disneyworld customer service!!

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There is a snail mail address on page 1. I don't think your spouse is involved because you are not getting a "distribution", you are doing a transfer or rollover. A distribution would be the case if you were cashing out your account.

 

If I were you, I would call up Fidelity and ask them if they can do a "trustee to trustee transfer". This type of transfer is commonly done, and avoids you having to deal with the old providor. Fidelity, you and the Ameriprise head office may have a 3-way phone conversation to establish that you want to do the transfer. Fidelity will know if you have to deal with the Ameriprise paperwork. Having the new providor "pull" the account from the old providor is quicker than trying to "push" the account out of the old providor. The new providor has an incentive to make it happen, the old providor does not.

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On page 6, under General Information About Rollovers:

 

 

How do I do a rollover?

There are two ways to do a rollover. You can do either a direct rollover or a 60-day rollover.
If you do a direct rollover, the Plan will make the payment directly to your IRA or an employer plan. You should contact the IRA sponsor or the
administrator of the employer plan for information on how to do a direct rollover.

Fidelity is the new administrator of your employer's 403b plan. Ameriprise calls their 403b a TSA (Tax Sheltered Annuity). If Fidelity can't do a trustee to trustee transfer, a direct rollover would be better than a 60 day rollover. A direct rollover has Ameriprise sending you a check, made out to "Fidelity for the benefit of (your name)". A 60 day rollover has Ameriprise sending you a check, made out to you. You have 60 days to get the money to Fidelity, after which the IRS considers it a taxable distribution. You do not want income tax deducted from your funds by Ameriprise.

 

Try to get Fidelity to do a trustee to trustee transfer, and if that isn't possible, try for a direct rollover.

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One of the options you may want to look into is a single recordkeeper for the district, one with a brokerage option. A single vendor would get rid of annuities, surrender charges and lower the cost for most of the participants by half. For the people, like you who want to spend the time to do the research, the brokerage option gives you access to the fidliety and vanguard funds (and also ETF's) for less money than Aspire would cost. More and more school districts are moving to a single recordkeeper and the benefits are impressive!

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debbyk,

If it was only that easy.

Can you elaborate - is that what they're doing at your district? Or are you in the business?

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Moe,

 

Debbyk is offering good advice. The brokerage window (if you have one) is a viable work-around for all of the this nonsense. When LAUSD was with VALIC.....VALIC partnered with Charles Schwab. The 403 CalstrsPension2 is partnered with Voya and they use TDAmeritrade. The 457 CalstrsPension2 is with TIAA and they offer their own brokerage window as does Fidelity. The same committee that makes the vendor selections makes this decision. Steve (from this site) can elaborate on this because he was on the LAUSD committee that got this for us.

 

Like Debbyk suggests, the brokerage option offers access to hundreds of no-load, no transaction fees, mutual funds. If you like to do your own research...this is an excellent work-around. Bob

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I don't think the OP rhollowood needs a brokerage option. His TPA (TSA CG) has included Fidelity in the list of providors he can use. A Fidelity 403b will give him a wide choice of funds, including Fidelity's Spartan Index funds. I think that's all he needs.

 

I notice that Fidelity has lowered the net ER of TSM and TBM:

Spartan Total Mkt Index, FSTVS, ER 0.07% for the US stock mkt (now net ER is 0.05%)

Spartan Total US Bond Index, FSITX, ER 0.17% (now net ER is 0.07%)
and either
Spartan Global Ex US Index, FSGDX, ER 0.12% or
Spartan International Index, FSIVX, ER 0.12%
If you want to include Emerging Mkts in your Int'l Stock fund, use Global Ex US Index, if not, use Int'l Index.

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I agree with Krow. Brokerage is good to help you escape bad choices but if you have fidelity or vanguard index choices available why bother.

 

 

Just a side note: My Blackrock 457B plan recently wrote us to tell us they were dropping their emerging markets index fund and all participants in it would have their money rolled over into their total international fund index. Luckily I don't invest in emerging markets so it doesn't affect me.

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Is there a 'brokerage window" on this partial list of OMNI's P3 options?

We very recently have had a heavily-marketing rep from GWN offering NEA benefits. I was told we could buy the Vanguard and Fidelity funds from them (but there's is an added expense in doing so). Are they considered a brokerage window?

How is this option less expensive than Aspire's added 0.15%? (This list should soon be adding Aspire - in September.)

Ameriprise

AXA
GWN/Employee Deposit Acct

Met Life

Mutual Inc/Plan Member services

oppenheimer

Legend Group/Ad serv

Voya International(ING Natl NY)

 

planDet_P3_NoEnrollmentIcon.png

 

Thank you for any input. (This list should soon be adding Aspire - in September.)

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So Fidelity was surprisingly unhelpful in this. To distill the conversation with the rep it was: do the Ameriprise paperwork for a direct rollover and we'll give you the address to get it to us overnight. Really said there was nothing they could do. Frustrated me enough that I'm calling the third party administrator and seeing if I can do a 100% drawdown and pay the surrender charge to be completely done with these people or if the process would have to start from scratch to do that.

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Sorry you are having difficulties. If you are getting 3% from this annuity. Leave it and in five years then transfer it.

 

In the meantime, just start a new contribution. Its not worth the stress as I understand it, you are getting 3%.

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I don’t know anything about doing a 100% drawdown through the TPA. I hope you aren’t considering cashing out the 403b (taking a distribution)? That would be a very big mistake. In addition to the surrender fee, you would loose the tax-deferred advantage of your retirement savings, which is very valuable, you would pay a 10% penalty for taking a distribution before age 59.5, and you would pay income tax on the distribution.

I’m sorry to learn that Fidelity wasn’t able to help more. I think Fidelity would be more helpful if you were transferring a mutual fund 403b rather than an annuity 403b. It looks like Ameriprise uses one form for many different types of transfers, rollovers and distributions. That makes the form seem complicated and confusing, and I suspect that was a desired effect. It’s understandable that you feel ripped off and so angry that you want to get away from them as soon as possible. Don’t let them win by forcing you into a hasty and costly decision.

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Like I said earlier American Express (Ameriprise )found ways to stall and complicate the transfer process when I went through it. It shouldn't matter that you are going from an annuity to a non-annuity product. I would continue to talk to your TPA, Fidelity, and Ameriprise (call their central office) and be assertive. Its your money and I would push this as far as it needs to go until you get satisfaction. I have made plenty of transfers over the years and the only trouble I had was with American Express. I think its in their corporate genes to not let money get away. I think they will hope you will get discouraged and abandon your attempts to move the money. This would be especially true if you have a larger asset transfer. I think continued communication will help you get the transfer done eventually unless your plan document specifically states you can not transfer from an annuity to a non-annuity product on your vendor list.

 

However like Krow stated you don't want to do anything that will cost you money in taxes and or penalties by cashing out. Also I have never needed a notary to make a transfer. Don't let Ameriprise jerk you around. In my day we used to call them American Depress.

 

 

Tony

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from page 6 of the Ameriprise form:

"How do I do a rollover?

There are two ways to do a rollover. You can do either a direct rollover or a 60-day rollover.

If you do a direct rollover, the Plan will make the payment directly to your IRA or an employer plan. You should contact the IRA sponsor or the administrator of the employer plan for information on how to do a direct rollover.”

 

 

You should do the direct rollover, not the 60-day rollover. I don’t think this form should be a problem to fill out if you decide you want to roll over your Ameriprise 403b to Fidelity. If I had to fill out the form, I’d do it the following way. If you have any questions, please ask them.

Page 1

supply the account number in upper right-hand corner

Page 1, ,Part 1
Plan Type: Tax Sheltered Annuity (TSA)
Amount to be moved: 100%
Page 1, Part 2
Company name: Fidelity
Advisor/Agent: none
Owner name: your name
Product name: 403b7
Product type: mutual fund
Page 2, Part 2 (cont’d)
Product is NOT an annuity, do not check.
Plan type: other: 403b7
Delivery Instructions: Get these from Fidelity
Page 2, Part 3
Supply your school district's name, EIN, address, phone #
Page 2, Part 4
Does not apply to your rollover
Page 3, Part 4
Does not apply to your rollover which is not taxable. You could check “Do not withhold” anyway.
Most of this page is information for you to read.
Page 4, Acknowledgements and Signatures
Direct Rollover and Conversion: They will give you 30 days to think over your rollover decision, during which you can ask for a distribution, which they will process without delay.
Signing means you want a Direct Rollover
Page 4, Spousal Consent
Your 403b plan is not an ERISA plan, and you are not taking a distribution, so this doesn’t apply
Page 5, Part 6
Notarization: Doesn’t apply.
Page 5, Part 7
Acceptance by Fidelity officer. I think Ameriprise can do this by phone or internet. Ask Fidelity.
Pages 6, 7 and 8
Special Tax Notice for Plan Distributions.
Because you are doing a Direct Rollover, most of these 3 pages don’t apply to you. Have a read to make sure. There’s a lot about a non-direct rollover, where you receive a check, with 60 days to get it to the new 403b. There are penalty tax issues and income tax issues possible if not all the money gets sent to the new 403b in time.
I went through this process twice with a VALIC 403b annuity. It’s slow and frustrating, but eventually my money showed up at Fidelity (and Vanguard for the rest of it.) In the meantime, I hope you are contributing to your new Fidelity 403b, using their excellent Spartan Index funds!
By the way, I don’t think it’s fair to blame all the complexity and red tape on Ameriprise. Congress has some of the blame for not preventing non-ERISA 403b’s and for allowing an insurance industry free-for-all to sell to uninformed teachers. The IRS is not known for reducing complexity or improving clarity for the 403b user. As has been discussed in other threads, there’s a lack of leadership and knowledge on many levels—, school districts, unions, educators, etc.
Hang in there!

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