Death and Divorce Transfers

Transcription

1 Death and Divrce Transfers OVERVIEW August 2015

2 2015 Pershing LLC. Pershing LLC, member FINRA, NYSE, SIPC, is a whlly wned subsidiary f The Bank f New Yrk Melln Crpratin (BNY Melln). Trademark(s) belng t their respective wners. Fr prfessinal use nly. Nt fr distributin t the public. The infrmatin cntained herein, including any attachments, is prprietary t, and cnstitutes cnfidential infrmatin f Pershing. It may nt be reprduced, retransmitted r redistributed in any manner withut the express written cnsent f Pershing LLC.

3 INTRODUCTION Intrductin This verview details the requirements fr prcessing transfers resulting frm: Death f a participant r divrce settlement f a retirement accunt hlder fr accunt registratins where Pershing is the Custdian Death f a participant r divrce settlement f a retirement accunt hlder fr qualified retirement plan accunts where Pershing is the Custdian 3

4 PROCESS TRANSFERS FOR ACCOUNT REGISTRATIONS Prcess Transfers fr Accunt Registratins This table summarizes the requirements fr prcessing transfers resulting frm the death f a participant r divrce settlement f a retirement accunt hlder fr the fllwing accunt registratins where Pershing LLC is the custdian: Individual Retirement Accunt (IRA) Rth Simplified Emplyee Pensin (SEP) Savings Incentive Match Plan fr Emplyees (SIMPLE) Tw-year rule applies (if transfer is befre the tw-year rule is met, must establish a SIMPLE IRA t receive the funds.) Ntes: Spuse sle beneficiary can treat the Inherited Assets as his r her wn and can transfer t his r her wn IRA r set up a new Traditinal IRA t receive the assets. Nn-spuse beneficiaries will always need t set up an Inherited IRA type t receive the assets. 4

5 PROCESS TRANSFERS FOR ACCOUNT REGISTRATIONS Internal nnreprtable transfer f assets between Pershing Retirement accunts due t death. Cpy f mst recent adptin agreement r designatin f beneficiary frm Cpy f death certificate Signed asset mvement frm r LOA frm receiving beneficiary Jurnal Request: 4 p.m. (ET) Service Center Request: 3:30 The brker-dealer initiates the mvement via Asset Mvement. Path: Jurnals > Mve assets between accunts. Fr mvements between different brker-dealers within Pershing, the delivering brker wuld need t submit a Service center request. Path: Retirement Prcessing > Distributins > One Time Distributin Ensure the date f death has been added t the decedent s accunt fr the death transfer request reasn t be available in Asset Mvement. 5

6 PROCESS TRANSFERS FOR ACCOUNT REGISTRATIONS External nnreprtable transfer f assets t a beneficiary IRA utside f Pershing. Cpy f mst recent adptin agreement r designatin f beneficiary frm Cpy f death certificate Prvide Cntra Firm Transfer paperwrk, signed by the individual receiving the Assets, alng with cnfirmatin f the delivery instructins and cntra firm accunt number. Letter f Acceptance frm the cntra firm, t cnfirm an inherited IRA has been established fr the beneficiary receiving the assets, when applicable 1. Distributins (FFW and Checks): 4:00 Service Center Request: 3:30 The brker-dealer initiates the check r FFW request via Asset Mvement by selecting any pay reasn fllwed by a service center request t adjust the cding t death transfer. Path: Retirement Prcessing > Distributin> Current year prcessing adjustment. 1Spuse sle beneficiary can treat the Inherited Assets as his r her wn and can transfer t his r her wn IRA r set up a new Traditinal IRA t receive the assets. Nn-spuse beneficiaries will always need t set up an Inherited IRA t receive the assets 6

7 PROCESS TRANSFERS FOR ACCOUNT REGISTRATIONS Internal nnreprtable transfer f assets between Pershing Retirement accunts due t Divrce. Order f divrce r divrce decree: (A) Signed by an authrized signr f the curts; generally a Judge (B) Specific t the IRA such as: IRA with Pershing, IRA with (firm name); list the IRA Accunt Number (C) Specific allcatin f assets: such as percentage r dllar amunt At times the decree will direct Pershing t the Settlement Agreement fr the divisin f assets, if s, items in steps B and C must be in the Settlement Agreement Asset Mvement frm signed by the individual giving up the asset directing Pershing t remve assets frm his r her accunt and credit the frmer spuse s IRA 2. In the event the decree states a frmula f hw t divide the assets versus a specific dllar amunt r percentage, r the accunt is fully invested and shares need t be mved t meet a specific dllar amunt an asset mvement frm signed by bth parties is required. 2Fr beneficiary r divrce transfers when the delivering accunt is a SIMPLE IRA, the tw-year rule applies (if transfer is befre the tw-year rule is met, the receiving accunt must be established as a SIMPLE IRA t receive the funds.) The tw-year perid begins n the first day n which yur emplyer depsits cntributins in yur SIMPLE IRA. Jurnal Request: 4 The brker-dealer initiates the mvement via Asset Mvement. Path: Jurnals > Mve assets between accunts. Fr mvements between different brker-dealers within Pershing, the delivering brker wuld need t submit a Service center request. Path: Retirement Prcessing > Distributins > One Time Distributin. 7

8 PROCESS TRANSFERS FOR ACCOUNT REGISTRATIONS External nnreprtable transfer f assets due t Divrce t an IRA utside f Pershing. Order f divrce / divrce decree: (A) Signed by an authrized signr f the curts; generally a Judge (B) Specific t the IRA such as: IRA with Pershing, IRA with (IBD Name), list the IRA accunt number (C) Specific allcatin f assets: such as percentage r dllar amunt At times, the decree will direct Pershing t the settlement agreement fr the divisin f assets, if s, items in steps B and C must be in the settlement agreement Letter f Authrizatin signed by the individual giving up the assets directing Pershing t remve assets frm his r her accunt and credit the frmer spuse. Prvide Cntra Firm Transfer paperwrk, signed by the individual receiving the assets, alng with cnfirmatin f the delivery instructins and cntra firm accunt number. Distributins (FFW and Checks): 4:00 The brker-dealer initiates the check request via Asset Mvement by selecting QDRO/Divrce Transfer. The brker-dealer initiates a federal funds wire by selecting any pay reasn fllwed by a service center request t adjust the cding t QDRO/Divrce fllwed by a Service Center request t adjust the cding. Path: Retirement Prcessing > Distributin > Current year prcessing adjustment. Letter f Acceptance frm the cntra firm, t cnfirm an IRA has been established fr the frmer spuse receiving the assets. 8

9 PROCESS TRANSFERS FOR QUALIFIED RETIREMENT PLAN ACCOUNTS Prcess Transfers fr Qualified Retirement Plan Accunts This table summarizes the requirements fr prcessing transfers resulting frm the death f a participant r divrce settlement f a retirement accunt hlder fr the fllwing qualified retirement plan accunts where Pershing LLC is the custdian: 401k MPP PSP 403B7 Omnibus Qualified Retirement Plan Accunts Individual K plans with Ascensus as recrdkeeper 9

10 PROCESS TRANSFERS FOR QUALIFIED RETIREMENT PLAN ACCOUNTS Emplyer and Participant Retirement Accunt Types Fr reprting purpses, a temprary accunt is required t be set up t receive the death nnreprtable transfer frm the deceased participants QRP accunt. Nte: This prcess als includes Omnibus Qualified Retirement Plan Accunt when the Plan Administratr is instructing Pershing t generate the Tax Reprting. Transfer Due t Death Cpy f mst recent QRP Designatin f Beneficiary frm Cpy f death certificate A QRP accunt must be pened fr the receiving beneficiary referencing their name and TIN/SSN. The accunt must mirrr the decedents accunt and be set up as an inherited individual retirement accunt type (Emplyee Data Wrksheet is required and a Designatin f Beneficiary frm may be required t set up the accunt.) Please nte a Designatin f Beneficiary frm is nt required if yu immediately deplete the accunt. Signed LOA frm trustee/plan administratr 3 authrizing the jurnal frm delivering accunt t the new accunt. 3Plan Administratr/Trustee signatures. Per the QRP Adptin Agreement, the term Plan Administratr will include any persn authrized t perfrm the duties f the Plan Administratr and prperly identified t the trustee as such. The Prttype Spnsr will, in n case, be designated as the Plan Administratr. The Plan Administratr shall be a named Fiduciary f the Plan fr purpses f ERISA Sectin 402(a). Jurnal Request: 4 Once the assets have been transferred t the temprary accunt under the plan, t prcess a direct rllver t an IRA r a distributin, a QRP 102 distributin frm signed by the beneficiary and plan administratr is required. Please nte, if prcessing t an IRA utside f Pershing, an acceptance letter frm the cntra firm must accmpany the QRP 102 distributin frm. 10

11 PROCESS TRANSFERS FOR QUALIFIED RETIREMENT PLAN ACCOUNTS Transfer Due t Divrce A QRP accunt must be pened fr the frmer spuse referencing his r her name and TIN/SSN. The accunt must mirrr the riginal accunt hlder and be setup as a Participant Retirement Accunt Type. (Emplyee Data Wrksheet is required and a Designatin f Beneficiary frm may be required t set up the accunt.) Please nte a Designatin f Beneficiary frm is nt required if yu immediately deplete the accunt. Signed LOA frm trustee/plan administratr authrizing the jurnal frm delivering accunt t temprary accunt. Jurnal Request: 4 Once the assets have been transferred t the temprary accunt under the plan, t prcess a direct rllver t an IRA r a Distributin, a QRP 102 distributin frm signed by the beneficiary and plan administratr is required. Please nte, if prcessing t an IRA utside f Pershing, an acceptance letter frm the cntra firm must accmpany the QRP 102 Distributin frm. Pershing des nt review r apprve Qualified Dmestic Relatins Orders (QDROs). This is the respnsibility f the trustee/plan administratr. QRP accunts where Pershing is the custdian Omnibus Retirement Accunt Type where the Plan Administratr will be respnsible fr tax reprting. LOA frm trustee r plan administratr with instructins t issue a check payable t the plan and cnfirming they will be respnsible fr tax reprting. The check will be mailed t address n recrd. Disbursements: 4:00 The brker-dealer initiates a check request via Asset Mvement. The check must be payable t the plan (specifically listing the name f the plan, fr example: ABC 401K r Jhn De Cnstructin PSP.) 11

12 PROCESS TRANSFERS FOR QUALIFIED RETIREMENT PLAN ACCOUNTS Individual K plans with Ascensus as recrdkeeper transfers due t death r divrce Must cntact Ascensus fr prcessing (800) ptin 4 fr recrdkeeping services supprt 12