Can I transfer from one 401(k) provider to another at same workplace?

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Topic Author
dropdx
Posts: 22
Joined: Thu Jun 06, 2019 9:01 pm

Can I transfer from one 401(k) provider to another at same workplace?

Post by dropdx » Tue Jul 09, 2019 11:16 pm

My workplace currently has two crappy 401(k) providers. I'm pushing HR to look for an additional, lower-fee provider, and they said they would look into it.

If I start contributing to one of our current crappy 401(k) providers and my employer does get a better, lower-fee provider, then can I transfer? If I can, then is there any tax liability?

Thanks

bikesandbeers
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Re: Can I transfer from one 401(k) provider to another at same workplace?

Post by bikesandbeers » Wed Jul 10, 2019 12:25 am

Not sure if 401k is the same, but my organization is transitioning from one 403(b) provider to another, and we have a choice if all, some, or none of our assets get transfer to the new provider. We were told that the employer cannot legally tell employees they have to transfer everything.

lakpr
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Re: Can I transfer from one 401(k) provider to another at same workplace?

Post by lakpr » Wed Jul 10, 2019 4:48 am

It is quite unusual for a company to offer two separate 401k providers ... first time I am hearing about it in the past 8 years I have been on this forum. Yes with 403b, but not with 401k.

That said, there should be no tax liability to transfer assets from one 401k provider to another. Just make sure it is a trustee-to-trustee transfer, you don't withdraw it yourself from one plan and deposit it in another plan. You could end up with a lot of tax related mess on your hands.

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ResearchMed
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Re: Can I transfer from one 401(k) provider to another at same workplace?

Post by ResearchMed » Wed Jul 10, 2019 6:42 am

bikesandbeers wrote:
Wed Jul 10, 2019 12:25 am
Not sure if 401k is the same, but my organization is transitioning from one 403(b) provider to another, and we have a choice if all, some, or none of our assets get transfer to the new provider. We were told that the employer cannot legally tell employees they have to transfer everything.
Regarding whether the employer "can" legally tell employees about transferring...

When our 403b plan, which had always been TIAA-CREF entirely, added Fidelity *and* Vanguard, a decision "was made FOR us" that almost all of the T-C mutual funds (of a somewhat limited choice allowed) WOULD be moved out of T-C. Participants could move their money to a MM fund for transfer or, if they left it in some of the mutual funds, there was a mapping to similar mutual funds at Vanguard.

Apparently the "CREF" funds (and Trad Annuity & TREA) all had to stay at T-C unless the participant chose to move them, because of the annuity contract.

At the same time, we were told that we could never again add money to the 403b plan's TREA, although before the effective date, we could move as much as we wished into TREA. Knowing we could always move money out of TREA (once quarterly, etc), we moved extra into TREA.

We can move our 403b money between Vanguard and Fidelity without restrictions.

So it was accurate in our case that we were not told to move *everything*, but unless we put our money into the CREF accounts/Trad Ann/TREA, the money WOULD be moved.

There were a few TIAA (non-CREF) *exceptions", which were never explained. IF we had money in those, they remained; if they were depleted, nothing could be put back in. Odd.

RM
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Stinky
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Re: Can I transfer from one 401(k) provider to another at same workplace?

Post by Stinky » Wed Jul 10, 2019 8:38 am

dropdx wrote:
Tue Jul 09, 2019 11:16 pm
My workplace currently has two crappy 401(k) providers. I'm pushing HR to look for an additional, lower-fee provider, and they said they would look into it.

If I start contributing to one of our current crappy 401(k) providers and my employer does get a better, lower-fee provider, then can I transfer? If I can, then is there any tax liability?

Thanks
I'm surprised that your workplace currently has two 401(k) providers. I'd be amazed if they allowed a third to come in (and wonder whether a third would even want to come in to a place that has two providers).

Could you use your energies to get one good provider in and kick the other two out? If that were to happen, employees could presumably leave their 401(k) balances with the current crappy provider or move to the new, better provider.
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Topic Author
dropdx
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Joined: Thu Jun 06, 2019 9:01 pm

Re: Can I transfer from one 401(k) provider to another at same workplace?

Post by dropdx » Sat Jul 13, 2019 10:14 am

lakpr wrote:
Wed Jul 10, 2019 4:48 am
It is quite unusual for a company to offer two separate 401k providers ... first time I am hearing about it in the past 8 years I have been on this forum. Yes with 403b, but not with 401k.

That said, there should be no tax liability to transfer assets from one 401k provider to another. Just make sure it is a trustee-to-trustee transfer, you don't withdraw it yourself from one plan and deposit it in another plan. You could end up with a lot of tax related mess on your hands.
Thanks! And we are offered both a traditional and Roth 401(k) and 457(b), so maybe that's why?

Topic Author
dropdx
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Joined: Thu Jun 06, 2019 9:01 pm

Re: Can I transfer from one 401(k) provider to another at same workplace?

Post by dropdx » Sat Jul 13, 2019 10:16 am

Stinky wrote:
Wed Jul 10, 2019 8:38 am
I'm surprised that your workplace currently has two 401(k) providers. I'd be amazed if they allowed a third to come in (and wonder whether a third would even want to come in to a place that has two providers).

Could you use your energies to get one good provider in and kick the other two out? If that were to happen, employees could presumably leave their 401(k) balances with the current crappy provider or move to the new, better provider.
They do offer both a traditional and Roth 401(k) and 457(b). My goal would be to get one provider, but I'm not sure what will happen - possibly nothing. But I am at least going to try. Currently we have VALIC and Nationwide, which have ridiculous fees.

retiredjg
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Re: Can I transfer from one 401(k) provider to another at same workplace?

Post by retiredjg » Sat Jul 13, 2019 4:57 pm

Your traditional 401k and Roth 401k are the same plan, not two separate plans.

The 457b is a separate thing entirely.

autolycus
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Re: Can I transfer from one 401(k) provider to another at same workplace?

Post by autolycus » Mon Jul 15, 2019 3:00 pm

bikesandbeers wrote:
Wed Jul 10, 2019 12:25 am
Not sure if 401k is the same, but my organization is transitioning from one 403(b) provider to another, and we have a choice if all, some, or none of our assets get transfer to the new provider. We were told that the employer cannot legally tell employees they have to transfer everything.
403b plans are different because they are individual annuity accounts rather than a single plan trust account or group annuity.

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