Rollover from 1 403b into another 403b?

steve_k · December 27

While working, I had two 403b accounts, my contributions went into 1 account and my employer's matching went into a separate account. Last year (after I retired) I decided to consolidate into a single account so I did a rollover of the amount in the my contributions account into the account with my former employer's matching. According to Vanguard, the steps to carry out the rollover was:
#1) Vanguard sent me a check for the entire amount for the 'my contributions' account,
#2) I endorsed and sent the check back to Vanguard for deposit into the employer matching account, along with the designated Vanguard form indicating that the check was the amount being rolled over into the other account.

So, my question is: What is the preferred method or transaction entries for making these 2 entries into their respective accounts in Quicken?

Boatnmaniac · December 29

So, are there 2 different issues here? This thread originally started out about a rollover from one 403(b) account into another. Or did I misunderstand the original post (OP)?

Assuming I did not misunderstand the OP: Since there was a distribution check that accomplished this the simplest solution IMO is to do a Sell transaction in the account that the distribution check came from with the cash from the transaction being transferred into the other 403(b) account. Then in the receiving account you could do a Buy transaction(s) for the security(ies) that was/were bought with the cash from that deposited check.

That would be the simplest way to do it but if you have some OCD I could walk you through a more detailed process that would more closely reflect what actually happened but I don't see any real benefit to do that since there are no actual tax implications from the rollover.

But now I am hearing about an exchange of Retirement Trust funds, as well? Did this occur in just one of the accounts (if so, which one) or did it occur in both accounts?

Tom Young · December 28

That process you describe with Vanguard strikes me as odd, but that's pretty irrelevant to your question.

Look at your Vanguard account at their website and see how they effectuated the transactions and what the results were.

If they simply moved the securities in one account to the other account - those securities should end up with the same date of acquisition and cost basis as they had in the old account - then you should be able to use the Transfer Shares Between Accounts wizard to move them out of the old and into the new.

If they reported these transactions as a Sell and Buy event, with the same "new to the account" securities but with new acquisition and cost bases, they you'd follow that pattern.

If they did these transactions in some other fashion, then come back and explain what they actually did.

I suppose that this could get quite complicated if you had both pre-tax and after-tax contributions while you were working.

Boatnmaniac · December 28

Yes, that transfer process with Vanguard might seem odd since it appears it was a Vanguard-to-Vanguard transfer. But my guess is that the two accounts had different legal owners…one was you and the other was your employer….making it a transfer of funds between different financial and legal entities. If this was the case, then it would make perfect sense that you would be sent a disbursement check which you needed to endorse and return to Vanguard. That would be much like when I had two 401(k) accounts at UBS….one with an ex-employer and one with a current employer. When I wanted to roll them both together I was required to follow the same process….receive a disbursement check from UBS and then return the endorsed check to UBS.

Have you been downloading these accounts from Vanguard or have you manually entered the transactions?

steve_k · December 29

I did regular downloads for quite a few years and then I had an issue with my Quicken data file about 2 years ago. The help person at Quicken suggested that I do a "super validate repair" on the Quicken data file which more or less worked but there have been little idiosyncrasies with a few transactions in some accounts that I have had to work through and around. Regardless, the latest change that I am having real issues with was the fund managers at my former employer decided to exchange the fund that everything was in. It was a seemingly insignificant change transitioning from the "Target Retirement 2020 Trust Plus" fund to the "Target Retirement 2020 Trust Select" fund. It was when I downloaded the OFX file for this transaction and tried to import that into Quicken that the 2 accounts lost their minds. Because I had not made the entry for the rollover properly, somehow importing the QFX data gave me my old balance (pre-rollover) into the rolled out of account. As a result, I am trying to make sure the entries for the rollover have been done properly.

Any guesses as to whether I should close out the rolled out of account in Quicken?

Any guidance as to how I should manually enter the fund exchange? Is this a "mutual fund exchange" or maybe I should enter it as 2 transactions; #1) sell shares of the old fund and #2) buy shares of the new fund?

Thanks in advance for your time and patience.

Tom Young · December 29

Any guesses as to whether I should close out the rolled out of account in Quicken? "

If that's the Account for the employer contributions and it no longer exists, then that Account is done with transactions and could be closed, or simply hidden and made separate.

Most likely it would be a mutual fund exchange transaction - a move out of the old fund and into the new. That might result in lots in the new fund that don't have the exact same number of shares as existed in the old fund - the ratio isn't always 1 for 1 - but the basis should be the same.

Since there's no tax effect in retirement accounts for Buy/Sell transactions you could go that way too, if you find it easier.

Boatnmaniac · December 29

So, are there 2 different issues here? This thread originally started out about a rollover from one 403(b) account into another. Or did I misunderstand the original post (OP)?

Assuming I did not misunderstand the OP: Since there was a distribution check that accomplished this the simplest solution IMO is to do a Sell transaction in the account that the distribution check came from with the cash from the transaction being transferred into the other 403(b) account. Then in the receiving account you could do a Buy transaction(s) for the security(ies) that was/were bought with the cash from that deposited check.

That would be the simplest way to do it but if you have some OCD I could walk you through a more detailed process that would more closely reflect what actually happened but I don't see any real benefit to do that since there are no actual tax implications from the rollover.

But now I am hearing about an exchange of Retirement Trust funds, as well? Did this occur in just one of the accounts (if so, which one) or did it occur in both accounts?

steve_k · December 29

"are there 2 different issues here?"

I confess there may be more issues, but my 1st question went back to when I 1st encountered problems with the Quicken accounts. My hope is that once I get the rollover issue resolved (which I think your earlier suggestion did) the other issues such as the "employer initiated exchange" will be or get resolved. Back in October, the fund managers from my former employer did an "employer initiated exchange" where all shares of the 1 fund in the account were exchanged for shares in another fund. Total value of all shares did not change. Downloading and importing the QFX for this transaction caused problems. Although I think it unlikely, I have not ruled out the possibility that the QFX data files I download from Vanguard and import into Quicken may be flawed.

FWIW; I attempted to use the Mutual Fund Exchange as the transaction entry for the "employer initiated exchange". Whereas I guess that worked, it inserted several screens of transactions and so it now appears unnecessarily complicated. When I download the CSV file from Vanguard for this exchange transaction, it shows 2 transactions #1) Plan Initiated TransferOut and #2) Plan Initiated TransferIn along with the names of the 2 funds, number of shares and the share prices for that date. That simplicity seems intuitive and thus appeals to me. I am tempted to just enter such a transaction manually; it's certainly visually appealing.

Thanks again for your suggestions.

Boatnmaniac · December 29

I usually recommend entering transactions in the way that the financial institution does them. So I agree that Transfer Out and Transfer In transactions makes a lot of sense….except that Quicken does not have these types of investment transaction types (at least, not that I know of).

I think a reasonable alternative would be to do Remove - Shares Removed and Add - Shares Added transactions.

Another option would be to do a Sell transaction with the cash deposited to the account cash balance followed by a Buy transaction with the cash for this one coming from the account cash balance.

Rollover from 1 403b into another 403b?

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