In-Kind Transfers and Closed Funds

[RASAP]

This July, my company 401(k) plan will allow us to purchase almost any mutual we fund we want via a brokerage account. I called Vanguard to determine how investments in Vanguard funds would be handled when I roll over from a 401(k) to a Rollover IRA at retirement. The answer was that an "in-kind" transfer would take place. So far, so good. Then I asked, "What if one of the finds is closed at the time the in-kind transfer is to take place?" The answer was that I would no longer be able to keep that fund and that it would have to be sold.

Has anyone has any experience with this? Does this sound right?

 

[REWahoo]

...I asked, "What if one of the finds is closed at the time the in-kind transfer is to take place?" The answer was that I would no longer be able to keep that fund and that it would have to be sold.

Has anyone has any experience with this? Does this sound right?

I don't now about your specific in-kind transfer, but when I rolled over my 401(k) to Vanguard two years ago, I wanted to keep a portion of my portfolio in DODBX. The fund was closed to new investors but Dodge & Cox would allow any investor to purchase the fund in their rollover IRA if they could document they had been invested in DODBX in their 401(k).

I sent Vanguard a copy of my last 401(k) statement to prove I had been invested in DODBX, and they worked with Dodge & Cox to allow me to purchase the fund.

 

[WanderALot]

RASAP,

Like REWahoo, I rolled over a 401(k) containing the closed DODBX fund. Check out this thread:

http://early-retirement.org/forums/index.php?topic=10656.msg194639#msg194639

The key seems to be to call up Vanguard and mention that this trade has to be done as a "back office" transaction.