New documents: Will you allow rollover-in-kind?

[Jim Chad]

Looking at PPA restatements, I am thinking about my default being to allow rollover-in-kind. Has anyone ever had any problems with this?

[Belgarath]

Not sure I'd allow it for rollovers INTO the plan. But I have no problem with generally allowing for distributions, although I can foresee situations where it might be difficult if they have whacko/hard to value investments, etc...

(you didn't really expect a straight answer, did you? I can hardly remember the last time I said "yes" or "no" in this business)

[QDROphile]

You are really talking about distributions in kind. In addition to the valuation issue, applying withholding rules can be more complicated.

[Bird]

That's our default. I can't imagine not allowing a commission-free rollover of funds from a platform, and likewise wouldn't want to tell a small business owner that he had to sell and re-buy all of his securities in a brokerage account.

[BG5150]

I think you would have to take it on a case-by-case basis.

Would John Hancock or American funds transfer the assets in that way?

[Bird]

I think you would have to take it on a case-by-case basis.

Would John Hancock or American funds transfer the assets in that way?

Definitely. With American Funds, they go to A shares from R-whatever, and there's no sales charge, so it's a great deal.

(In case anyone doesn't know what I'm talking about, average expenses for R-2 are 1.43%, R-3 are 1.02%, and R-4 are .72%. A shares probably average around .7%.)

With insurance companies, they go into variable annuities, which have higher expenses, so it's not as good a deal.