The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing

URL:  http://boards.fool.com/403b-company-screwup-22279024.aspx

Subject:  403b Company Screwup Date:  3/29/2005  11:44 AM
Author:  jrr7 Number:  45314 of 90110

My mom's broker convinced her to rollover her 403b to his company. I wasn't in favor of this but didn't have any time to advise her on what she should do instead.

The company screwed up -- the rollover took place on the day dividends were due to be paid. They transferred the funds over to the new broker, and then paid the dividend. Only problem is the account didn't exist any more. So they sent the dividend check to my mom, which she cashed. They sent her a 1099 reporting the dividends as income.

In my understanding, though, this is an unqualified withdrawal from the retirement plan, and she also owes a 10% penalty. Is that correct?

Is there any way this can be corrected? Whose responsibility is it to correct it?
Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us