[wallabee4]

Have a profit sharing plan from company no longer work for. It requires I take only a certain % of the money out (sent to my IRA as a 401K rollover) each December. The place that cuts the checks for the company I used to work for told me check was cut Dec 27th. They also told me the $ is no longer in my account as of Dec 27th. It is withdrawn to cut this check (which, to me, makes no sense, the check may be 'cut,' but hasn't yet been received or cashed/deposited elsewhere--so where IS my money during the time between Dec 27 and the receipt of the check?) They also told me if my IRA hadn't received the check by Jan 15 to let them know and they'd have to cut a new check and cancel that one. Well, it wasn't received (it is being mailed from Iowa to Colorado, by the way) So they cancelled check and supposedly sent a new one.

Now it turns out the first check was rec'd on Jan 22. Twenty-two mailing days after it was sent across 3 states. (Only Nebraska is between Iowa and Colorado). So the deposit came in and then it was reversed, also on the 22nd. And I still have nothing. Don't know when the new check will arrive or if/even when it was sent.

But I strongly suspect somebody has been earning $ on my money this past month, esp if it is happening to other rollover people. What information do I need to demand when I call this company tomorrow? Why can't they do an electronic transfer in this modern day and age? Why can't they send checks via trackable mailing methods?

Should I complain to SEC? What rules are being broken?

[walt17]

There is always a transition time for moving funds from one institution to another. Even electronic transfers are not immediate. Paper checks routinely take several days. Money can't be in two places at once, so as soon as the sending process is initiated, the funds are unavailable until the process is completed at the receiving institution.

Some companies still do not process electronic transfers. Sending paper checks with a tracking method would be expensive. Think registered mail.

It doesn't sound like there was anything illegal about it. Filing a complaint would be a waste of your time.

[ScottGem]

A 401(k) is not like a savings account. The money is invested in shares of different types of mutual funds. To effect a distribution, those shares have to sold off. The cash is then put into the manager's checking account to cover checks.

Yes the plan manager may be earning interest on the checking account until the check clears, but there is nothing illegal about that.

[Fr_Chuck]

And on the letter that took so long, what was the post mark, the can not be liable for slow postage. Did you ask for the letter to be sent where there is tracking

[ebaines]

I am VERY surprised that someone is actually writing out a physical check and sending it via US mail to your IRA custodian. In this day and age such transfers ought to be electronic. It would help if you explain how you go about initiating the request to transfer $$ to your IRA - do you first contact the 401(k) administrator with your forner employer and ask them to send $$ to your IRA, or do you have the IRA custodian handle this for you? I would suggest that you should be having the IRA handle the entire transaction for you - you give them the info on your 401(k) accounty and ask them to make a rollover, and then they contact the 401(k) plan administartor to make it happen, and the IRA ought to be able to provide electronic transfer info which would speed the whole thing up.

I would also suggest that to minimize the rollover headache you should simply roll the entire 401(k) to your IRA all at once, and never have to worrt about it agan.

But as for your original question regarding whether any rules are being broken with the exxtended amount of timwe it takes to make the transfer - I don't believe so. To my knowledge there are no hard-and-fast rules on this, only that the custodian must make "reasonable" efforts to move the money along. Their definition of "reasonable" is probably different than yours, but I think as long as the money makes its way to the IRA custodian within 60 days or so they're probably not breaking any rules.

[ScottGem]

I am VERY surprised that someone is actually writing out a physical check and sending it via US mail to your IRA custodian.

That thought also occurred to me. At first I assumed this was an electronic transfer which is why you were debited immediately. But it became clear this was a physical check. In this day and age that is VERY surprising. I pay my bills using my banks bill pay service. Of more than a dozen bills I pay monthly, only ONE (a local oil dealer) does not accept electronic transfers.

I really find it hard to fathom any financial institution that would manage either 401(k)s or IRAs not accepted transfers.

[ebaines]

I really find it hard to fathom any financial institution that would manage either 401(k)s or IRAs not accepted transfers.

We'll wait to hear from the OP, but my guess is that he is requesting the 401(k) to send the distribution to his IRA custodian and provides only the mailing address (perhaps he's not aware of the IRA's electronic transfer details of their bank name, routing number and account number). The 401(k) administrator in turn just follows those directions. But if the IRA custodian were to contact the 401(k) plan administrator directly they would most likely ask for an electronic transfer and of course could provide all the required details.

[ScottGem]

We'll wait to hear from the OP, but my guess is that he is requesting the 401(k) to send the distribution to his IRA custodian and provides only the mailing address (perhaps he's not aware of the IRA's electronic transfer details of their bank name, routing number and account number). The 401(k) administrator in turn just follows those directions. But if the IRA custodian were to contact the 401(k) plan adminisrator directly they would most likely ask for an electronic transfer and of course could provide all the required details.

Probable!