In-kind Transfer for 401(k) plan from old trustee to new trustee

[Guest kdddk14]

In order to avoid realizing some of the losses in their funds, many companies are asking if they were to leave their current provider and trustee and go with a new provider and trustee, can the mutual funds move in-kind. This is not a brokerage type arrangement.

Is it possible to transfer plan assets in-kind between trustees?

[K2retire]

I assume you're talking about a corporate trustee, since individual trustees change regularly with no impact on the investments. Each service provider is likely to have their own rules for this.

[Bird]

It all depends on the investment arrangement. Certainly, funds can be transferred from one brokerage account to another, unless they are proprietary funds. But if the plan is using a platform, the new platform may or may not support the old funds.

In any event, the concern about selling funds "at a loss" is misguided and should not be a factor. If you sell a fund or funds at a low price, and turn around and buy the same or similar funds at a similarly low price, there's no harm done.