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This is a rant. My husband's late wife was a teacher. She opened a 403(b) through her school district administered by an insurance company. She did not put much into the 403(b) for which I am eternally grateful. She died over a decade ago. All paperwork was submitted to the insurance company through the probate court at that time. The insurance company refused to release the funds, or transfer the funds into a new account with the beneficiary as owner; but instead re-titled the account as an ABO with her husband as beneficiary.
I took the minimal paperwork that I had to a CFP to review about 3 years ago as I couldn't get any answers as to what type of account it is. He couldn't determine what type of account it is either as the paperwork does not say and the insurance company won't answer. I am just now learning it is a 403(b). The CFP told me that this insurance company has multiple class action suits throughout the years for refusing to distribute funds, and for false advertising. He told me to start right away attempting to withdraw the funds and to expect a fight.
This year I started the process. I called the insurance company to find out what form to fill out. They sent me the form. I called the insurance company for directions on how to fill out the form. They told me what to put in the boxes. I sent off the form overnight mail. A month later they sent me a letter telling me I had filled out the wrong from and sent me a new form to fill out (which is how I found out it is a tax advantaged 403(b).
I called the insurance company for directions on how to fill out the second form. They told me what to put in the boxes. I sent off the second form by fax.
They sent me a letter telling me that I had to fill out a distribution authorization from a benefit service company who must give permission to distribute the funds.
I called the benefit service company to find out what form to fill out. They said this was highly unusual since they no longer administer the account once the death certificate was received and according to their records the deceased is no longer the owner of record. But they faxed me a form to fill out and they will authorize the distribution. They told me to fax it back to them.
I tried to fax the form to them all day today, but the fax never went through. Tomorrow I will send it overnight mail and track delivery.
I'm wondering what possesses the State to use this insurance company for their 403(b) with this kind of track record.
I'm wondering why this benefit service company is involved with this at all.
I think I am dealing with a bunch of crooks and all of this is delaying tactics.
I'm wondering if we will ever get the money distributed to my husband.
I'm wondering what retired teachers are doing if they can't get their money out of their 403(b).
Last edited by LookingatFL; 08-15-2018 at 08:53 PM..
I strongly recommend that you do NOT reveal the name of the insurance company. The post will either be deleted outright or edited at least to remove the name of the company. Per the T.O.S., consumer complaints are not allowed.
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I'm sorry you have to go through this. I have a 403(b) account and have not had any problems getting access to my money. Probably because the people at Caltech picked an insurance company with a good reputation and would only choose a firm in the best interest of their employees. But I have heard that 403(b) accounts for teachers, (not at the university level), is a pretty bad deal. I'm guessing here, but I suspect union politics are involved.
Sounds like you might have to get a lawyer involved. Or possibly contact the state insurance commissioner and file a complaint.
I don't believe so. Does that make a difference? There is no surrender amount mentioned.
Major difference. You have to know the type of asset you are seeking to take control of disbursement’s from. The fact it is from a insurance company and a 403b could send up red flags.
Major difference. You have to know the type of asset you are seeking to take control of disbursement’s from.
The pension is from the state are you sure the 403 is also? That could be local employer
Well, I don't get any answers at all, and haven't gotten any answers for years. I've had a CPA call and a CFP call and they didn't get answers either. There are clues, however:
The first clue is that even though the annual statement of value does not state what type of policy it is, it does show "interest" credited to the account. This leads me to suspect that since it isn't "dividends"and there is no mention of "capital gains", it is probably not tied to the stock market. I just never realized before that insurance companies pay "interest".
No surrender charges are listed.
The biggest clue is that the Form titled: Request for Disbursement gives me the option to ask for a gross amount (20% taxes will be taken out from the gross amount) or a net amount (20% of taxes will be taken out from a higher gross amount) but it doesn't give me an option to annuitize payments. It all about withdrawing funds.
Also, because the amount of the plan is so tiny, I suspect it is closer to an IRA type of plan. But, I could very well be wrong and the form I filled out could be just another wrong form.
I need to keep aware of when the owner of the policy would have turned 70. That's been of concern to me.
I didn't realize the 403(b) might not be from the state.
It is very likely a 403(b.) All of this motivates me to see what will need to be done in case I kick the bucket in the near future. I have funds that have not been annuitized and I reasonably assumed the company would disburse the funds directly to the named beneficiaries upon receipt of a death certificate. Sheesh.
You want to know the easiest way to get this done? Get a financial advisor at and brokerage account like Fidelity, Morgan Stanley, any of those types of places. I am not recommending one, just telling you the type of company you need to do this with.
Give them Power of Attorney to TRANSFER the funds to them to manage in an account in your name, or whatever name. . They can then transfer it (they d this al the time) and you can either let them manage it if you do not need it or cash out with them.
I did this for a ROTH IRA that was a pain for that managing firm to communicate with me about after they combined with another company too many times. The brokerage I transferred it to now manages it along with my other similar assets.
Those companies know how to transfer the money around from company to company, plus they can tell you how to manage it and reduce your taxes.
Thank you, lae60. That's an excellent suggestion. If this attempt doesn't work, I will try it.
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