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I received a corrected 1099R issued for a distribution (ADP Excess) that did not occur prior to the rollover of my 401k. How do I reslove this issue?

I left my company on September 30, 2011; I rolled over my 401k from one financial institution to another on November 28, 2011. On April 14, 2012 I received a corrected 1099 for 2010 tax year ($5523.77) indicating ADP Excess. (The original 1099R was for 3741.54 was issued to me on 9/2/2010 for which I received a check and documentation explaining the situation) That is not the case with the corrected 1099R.

In fact the corrected 1099R was completed and sent to me well after the funds had been rollover to the new financial institution. So while they (MMLI Company) sent out a corrected 1099R, the funds (which are ineligible for a rollover) are sitting in the new financial institution (ING).

I contacted MMLI and advised them that I had not received the distribution, they advised me that when the completed the corrected 1099R the funds had already been forwarded and the new company (ING) would need to deduct the funds.

So here in lies the problem, if ING takes out the ineligible funds (roughly 1700+), they will issue me a 1099R for the same funds that MMLI has already sent out but failed to deduct prior to the rollover.

How do I resolve this?

Thank you D

Apr 20, 2012 by Deborah from Espanola, WA in  |  Flag
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7 votes

D -

The proper method would be to have communicate with ING and MMLI the error, and request of ING that they reverse the rollover to the extent of the error ($1,700+). After ING reverses the transfer in this amount, then MMLI would disburse to you the excess amount.

It involves a bit of effort on your part, or on the part of your financial advisor, presuming that you may be working with one. Regardless, it is best that it be corrected now to avoid complications down the road.

Best Regards,

Mark A. Trewitt, CLU, ChFC, AEP, CFP

Plans fail for lack of counsel, but with many advisers they succeed. Proverbs 15:22, NASB

Comment   |  Flag   |  Apr 21, 2012 from Plano, TX

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