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Rolling over my 401k to Vanguard
Old 11-20-2006, 05:34 PM   #1
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Rolling over my 401k to Vanguard

Hello,

I have an old 401k that I'd like to move with Vanguard. The thing that makes it complicated is that I have one holding in it, Dodge & Cox Balanced (DODBX), that's a closed fund. I'd like to keep that fund, but since it's a closed fund, I want to be careful to make sure I can get back into it once the account is moved to Vanguard. Apparently, 401ks are rarely moved in-kind, unlike IRAs. According to the Vanguard rep, this is because the 401k is governed by "federal rules" (I'm assuming he's referring to ERISA) that prevent this from happening. He suggested that the easiest way to do this would be to first rollover the 401k into a rollover IRA at the same institution and then have transfer the rollover IRA into another rollover IRA at Vanguard. Vanguard would be able to make sure that the assets are transfered in-kind.

This seems logical to me, but the thing I'm worried about is that the institution where my old 401k resides is Amerprise. Is there ANYTHING I should be careful about when doing this? I don't want to rollover it over to an IRA and find out that there are some hidden time-constraints (or fees) that I'd have to abide by before rolling over again to Vanguard.

Admittedly, the 401k doesn't have any fees, but the fact that's it's with Amerprise is what concerns me. Plus, I'd like to consolidate to Vanguard.

Thanks.

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Re: Rolling over my 401k to Vanguard
Old 11-20-2006, 05:44 PM   #2
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Re: Rolling over my 401k to Vanguard

Our office rolled our 401k into a new plan. No problem with doing in- kind rollovers. We had to specifically ask for the in-kind rollover however. Why don't you check with Vanguard to see if they will do what you want?

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Re: Rolling over my 401k to Vanguard
Old 11-20-2006, 05:53 PM   #3
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Re: Rolling over my 401k to Vanguard

Will the rollover affect when you can withdraw money? I know with my 457 I can take money out now, but if I roll it over to an IRA I have to wait till I'm 59 1/2 or pay penalties (or use SEPP).
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Re: Rolling over my 401k to Vanguard
Old 11-20-2006, 05:56 PM   #4
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Re: Rolling over my 401k to Vanguard

Quote:
Originally Posted by Patrick
Will the rollover affect when you can withdraw money? I know with my 457 I can take money out now, but if I roll it over to an IRA I have to wait till I'm 59 1/2 or pay penalties (or use SEPP).
Yes, if you rollover into an IRA you will have to follow the IRA distribution rules.
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Re: Rolling over my 401k to Vanguard
Old 11-20-2006, 06:38 PM   #5
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Re: Rolling over my 401k to Vanguard

Quote:
Originally Posted by Martha
Our office rolled our 401k into a new plan. No problem with doing in- kind rollovers. We had to specifically ask for the in-kind rollover however. Why don't you check with Vanguard to see if they will do what you want?
Martha,

Actually, it was the Vanguard rep that suggested that I do a rollover into an IRA at Ameriprise first before rolling it over to Vanguard. This rep told me that 401ks are not rolled over in-kind. I've had other reps tell me that it depends on the 401k institution. I checked with Amerprise and they state that they don't do rollovers in-kind, except to an Ameriprise IRA :. Of course, I wouldn't expect them to make it easy to move accounts out of their institution. Is there a requirement for the 401k provider to allow 401ks to be rolled over in-kind?

Quote:
Will the rollover affect when you can withdraw money? I know with my 457 I can take money out now, but if I roll it over to an IRA I have to wait till I'm 59 1/2 or pay penalties (or use SEPP).
Patrick,

I believe this is only true of 457s. They have a provision (unlike 401k and 403bs) that allow penalty free withdrawal before 59.5 as long as employment has been terminated. 401ks and IRAs both have the 10% penalty.

My primary concern is Ameriprise screwing me somehow if I rollover my 401k to an Ameriprise IRA before transfering it to Vanguard.

Thanks for the replies.
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Re: Rolling over my 401k to Vanguard
Old 11-20-2006, 06:58 PM   #6
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Re: Rolling over my 401k to Vanguard

Wander, Dodge & Cox says this about your situation:

If you own a Closed Fund through an employer’s retirement plan and you are receiving a distribution from the retirement plan, you may open an IRA rollover account in the same Fund. (page 44)

http://www.dodgeandcox.com/pdf/ira/dc_ira_11-06.pdf

I was in your exact position 18 months ago, with a large chunk of my 401k in DODBX and I wanted to keep that fund. I had no trouble getting Vanguard to talk with D&C to allow me to open an account and, through Vanguard, roll over part of my distribution into DODBX. I did no in-kind rollover, my 401k custodian (Scudder) sent my entire distribution to Vanguard who allocated it among the funds I designated.


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Re: Rolling over my 401k to Vanguard
Old 11-20-2006, 08:10 PM   #7
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Re: Rolling over my 401k to Vanguard

Quote:
Originally Posted by REWahoo!
Wander, Dodge & Cox says this about your situation:

If you own a Closed Fund through an employer’s retirement plan and you are receiving a distribution from the retirement plan, you may open an IRA rollover account in the same Fund. (page 44)

http://www.dodgeandcox.com/pdf/ira/dc_ira_11-06.pdf

I was in your exact position 18 months ago, with a large chunk of my 401k in DODBX and I wanted to keep that fund. I had no trouble getting Vanguard to talk with D&C to allow me to open an account and, through Vanguard, roll over part of my distribution into DODBX. I did no in-kind rollover, my 401k custodian (Scudder) sent my entire distribution to Vanguard who allocated it among the funds I designated.
Thanks for the info REWahoo. I did find out about this from D&C, but I'm a little nervous about this. The Vanguard rep I talked to said that this "should" work, but he's never seen it done before. He talked to a supervisor about this and said it's shouldn't be a problem, but he wasn't exactly Mr. Confident. Since you said it worked for you, I'll take another look at it. Did you find that it took a while for this to take effect? In other words:

1. 401k provider gets the "rollover to Vanguard" instruction
2. 401k provider liquidates the account
3. Sends cash over to Vanguard
4. Vanguard looks at the allocation instructions and has to verify that you are eligible to purchase closed fund
5. Vanguard buys the fund

I was told that this whole process could take 5 weeks according to D&C. Since the IRA transfer is done in-kind, it doesn't really matter how long the transfer takes since they are just transfering shares?
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Re: Rolling over my 401k to Vanguard
Old 11-20-2006, 08:33 PM   #8
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Re: Rolling over my 401k to Vanguard

Quote:
Originally Posted by WanderALot
Did you find that it took a while for this to take effect? In other words:

1. 401k provider gets the "rollover to Vanguard" instruction
2. 401k provider liquidates the account
3. Sends cash over to Vanguard
4. Vanguard looks at the allocation instructions and has to verify that you are eligible to purchase closed fund
5. Vanguard buys the fund

I was told that this whole process could take 5 weeks according to D&C.
In my case, working through Vanguard, it only took a few days and there were no questions, delays or hang ups of any sort. But remember, "Past performance is no guarantee of future results."

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Re: Rolling over my 401k to Vanguard
Old 11-20-2006, 09:09 PM   #9
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Re: Rolling over my 401k to Vanguard

here's a ?? a bit off topic...sorry for the hijack

Do I HAVE to do something with my 401k from the job i recently quit? ive inquired 2 times to HR about getting my $$ and no response. Of corse I can call John Hancock, but this thread reminded me I havent done so.

Is there a time limit to when i need to move i, if indeed i do? i'd like to rollover to a vanguard IRA
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Re: Rolling over my 401k to Vanguard
Old 11-20-2006, 10:41 PM   #10
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Re: Rolling over my 401k to Vanguard

Quote:
Originally Posted by thefed
Do I HAVE to do something with my 401k from the job i recently quit?
Unless you have less than $5000 in the account, the answer is No. Under $5000, the company has the right to automatically roll it over to an IRA.
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Re: Rolling over my 401k to Vanguard
Old 11-21-2006, 12:46 AM   #11
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Re: Rolling over my 401k to Vanguard

Quote:
Originally Posted by REWahoo!
In my case, working through Vanguard, it only took a few days and there were no questions, delays or hang ups of any sort. But remember, "Past performance is no guarantee of future results."

It took over two weeks for GE to liquidate my 401K, mail ME two checks (one of which was made out to Vanguard - which I overnighted to Vanguard), and finally get re-invested. As luck would have it both the Int'l indexes I sold in the 401K and those I bought at VG jumped nearly 3% in those two weeks - I can't recall seeing so many up days in a row.

IRA transfers from Schwab & Fido to Vanguard have been even slower...

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Re: Rolling over my 401k to Vanguard
Old 11-21-2006, 08:21 AM   #12
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Re: Rolling over my 401k to Vanguard

Quote:
Originally Posted by gindie
Unless you have less than $5000 in the account, the answer is No. Under $5000, the company has the right to automatically roll it over to an IRA.
And if you do not provide instructions for a direct IRA rollover, they will cut the check to you and withhold some money for taxes. So, if it is less than $5000 you better follow up.
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Re: Rolling over my 401k to Vanguard
Old 11-21-2006, 11:31 AM   #13
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Re: Rolling over my 401k to Vanguard

Wander

Can you let us know how this goes and if you run into any problems? I'm in the exact same situation with a Dodge & Cox fund at my previous employer 401K that I'd like to take to Vanguard.
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Re: Rolling over my 401k to Vanguard
Old 11-21-2006, 01:28 PM   #14
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Re: Rolling over my 401k to Vanguard

Quote:
Originally Posted by Aaron
Can you let us know how this goes and if you run into any problems? I'm in the exact same situation with a Dodge & Cox fund at my previous employer 401K that I'd like to take to Vanguard.
Will do. I still haven't decided which way to go.
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Re: Rolling over my 401k to Vanguard
Old 11-22-2006, 07:24 PM   #15
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Re: Rolling over my 401k to Vanguard

thanks for the info.

i will check into it soon, its been 2 moths and i havent heard a thing
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Re: Rolling over my 401k to Vanguard
Old 11-23-2006, 10:41 PM   #16
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Re: Rolling over my 401k to Vanguard

I just went through this scenario, moving a 401(k) from Fidelity to Vanguard. The 401k had some Fidelity and Third Avenue funds that I wanted to hang on to and move in kind to an established Vanguard IRA.

It took a few phone calls but went fairly smoothly. I did have to first roll over the Fido 401k to a Fido Rollover IRA, initiated via a phone call. There was a $30 fee to complete the rollover. That took just a couple of business days.

Then I sent an Account Transfer Form to Vanguard, asking to have the full Fido rollover IRA transferred in kind to my Vanguard IRA. Along with the Transfer form, Vanguard wants you to include a recent statement from the incoming account, listing all the assets.

Vanguard kept me informed with automatic emails on the status of the account transfer (not sure if this is just for Voyagers or not). When I called Fidelity to check on things, the Fido rep said they had the request and it would take six business days to complete...3 on their end and 3 on Vanguard's. That estimate was pretty much right on.

So this can be done in about a month's time, give or take.
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Re: Rolling over my 401k to Vanguard
Old 12-19-2006, 02:07 PM   #17
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Re: Rolling over my 401k to Vanguard

Well, it's done. Ameriprise, to their credit, quickly sent me the paperwork to rollover the 401(k) into Vanguard. They even pre-typed the form with all of my info and the only thing that I had to fill in was Vanguard's info and my account number. That's the good, now for the bad. They sent me the check instead of sending it directly to Vanguard. They did acknowledge their mistake and offered to reissue it, but I just express mailed it to Vanguard so was it wasn't a big deal except for opportunity cost (see below).

Vanguard seemed to handle things without problems. They credited my money market account the day after they received the check and then it took them 2 days to put in the order to buy DODBX. It took an additional 2 days for the order to be fufilled. For those of you who are planning to do this, I would suggest that you tell the Vanguard rep to talk to their "back office". These are the guys who talk to Dodge and Cox to authorize the purchase of DODBX. The first rep I talked to had heard of this process, but wasn't too sure about it. The second guy knew all about it. There was a 1 day delay because Dodge and Cox rejected the purchase initially, but after talking to the Vanguard rep they let the purchase go through.

Unfortunately, DODBX decided to go up about 0.7% to a new high for the 10 days that I was out of the fund! If Amerprise had sent it directly to Vanguard, I would have probably been up about $400! Oh well, it could just has well have worked the other way too. So the whole process took less than 20 calendar days with 10 days of it being out of the market.
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