Problem Rolling Traditional IRA into 401k - Fidelity

[johnnyc321]

I recently changed employers and our 401k is with Fidelity with low fees and a good fund selection. When I first set up the account in early January, I spoke to a rep and discussed rolling my traditional IRA into the 401k so that I can do backdoor roths and avoid the pro-rata rule.

That rep then advised me to open a traditional IRA account at Fidelity to roll my IRA into and once it was funded, to call back to do the quick roll over to the 401k. In fact, she opened the account for me when I was on the phone with her and provided me with the documentation to roll the IRA into Fidelity.

My rollover to the Fidelity traditional IRA was completed yesterday. I called today to initiate the rollover into the 401k and was told that because the IRA is comprised of funds from various sources (an old 401k, a small amount from a SIMPLE IRA, and traditional IRA contributions - all pre-tax), I cannot roll it into the 401k. He says it'll only accept 401k funds. Is this correct? The first rep mentioned nothing about this requirement.

[Duckie]

My rollover to the Fidelity traditional IRA was completed yesterday. I called today to initiate the rollover into the 401k and was told that because the IRA is comprised of funds from various sources (an old 401k, a small amount from a SIMPLE IRA, and traditional IRA contributions - all pre-tax), I cannot roll it into the 401k. He says it'll only accept 401k funds. Is this correct?

The IRS allows this type of rollover but apparently the plan does not. Some plans have more restrictive wording in their documents. Can you get a copy of your 401k plan docs? How did they know about the different sources?

[johnnyc321]

My rollover to the Fidelity traditional IRA was completed yesterday. I called today to initiate the rollover into the 401k and was told that because the IRA is comprised of funds from various sources (an old 401k, a small amount from a SIMPLE IRA, and traditional IRA contributions - all pre-tax), I cannot roll it into the 401k. He says it'll only accept 401k funds. Is this correct?

The IRS allows this type of rollover but apparently the plan does not. Some plans have more restrictive wording in their documents. Can you get a copy of your 401k plan docs? How did they know about the different sources?

He asked and I told him.

I am going to try calling the net benefits line again tomorrow and hope I get someone like the first person I spoke to. She seemed to know a lot more related to my plan.

[celia]

Here is another thread where someone is trying to roll a Rollover/ Traditional IRA to a 401K at Fidelity and is having difficulty.

[johnnyc321]

I called back this morning and got them to send me the forms for the rollover. I think the key is getting someone on the 401k team to handle the rollover. The person I spoke to yesterday was in the IRA/FA division.

[beyou]

If you know how much is nondeductible, rollover just the deductible untaxed portion. The rest can be converted to Roth.

[johnnyc321]

Update: I got so annoyed with this process that I put off the transfer for a few weeks. I finally received the the form from the 401k plan to do the rollover and it says that I need a check made out to the plan. In other words, moving the money into Fidelity first like the first rep advised me was a huge waste of time. I attempted to navigate the IRA site to find a rollover/distribution link but could not find anywhere that would allow me to request a check written to my plan like it needed to be.

The most annoying part of this rollover has been having the separate departments tell me that I need to speak to the other department to complete the rollover. None of them appeared to have any experience with rolling an IRA into a 401k. They all seemed confused about it. One, who is apparently an advisor, did not know what the pro-rata rule is. I called yesterday during a break and the person could sense that I was extremely frustrated with Fidelity and decided to just cut check for me and mail it to the plan.

The only good news is that the plan did not require Fidelity to certify that the funds are conduit IRA funds only.

Good luck to anyone else who tries this.

[JustinR]

Does your 401k plan use Fedelity's Net Benefits site?

In there, there's a rollover section that walks you through the entire process, including cutting a check.