Q. I am a retired federal worker. I am in the Federal Employees Retirement System, a Thrift Savings Program participant, and, because I am over 70½ years old, I have been taking my Required Minimum Distribution in the form of monthly payments based on my life expectancy. I also have a traditional Individual Retirement Account with my local bank. I also have a Roth IRA at this bank.
I want to consolidate some of my funds and increase my monthly payments by transferring my traditional IRA to my TSP account. I was told by the bank that the time for making changes was in the 10 days following the maturity date of the traditional IRA. The traditional IRA matured Dec. 14. On Dec. 15, I took a TSP-60 form, which I had filled out with the appropriate information, to my local bank, together with the TSP instructions for transfer. The local bank vice president filled out the bottom of the form, copied all the documents, and sent them on to the bank’s IRA division. She also gave me a copy. Then a nightmare began, which has not yet ended.
I was very busy before Christmas, and we were away over the Christmas holiday, so it wasn’t until we came back that I checked my TSP account balance, expecting to see the amount of the traditional IRA added to it. It was not.
On Dec. 30, I went back to my local bank to find out what had happened. I saw the vice president. She called the IRA division, and was told that they required a notarized signature, because the IRA was over $25,000. I remonstrated that the TSP required no such thing, but the IRA division said no, it was the IRA division that required the signature. The bank vice president then notarized my signature on the copy of the TSP-60, added the value of the traditional IRA — $35,000.67 — in the appropriate blank, and also noted the account number of the traditional IRA on the form. (The IRA division had been thinking of sending my *Roth* IRA to the TSP!) She then sent it all back to the IRA division.
Since then, nothing has happened. I check my TSP account balance every day, and the traditional IRA has never been added. On Jan. 6, I received a copies of some documents from the TSP — a request from the IRA division of my bank for a notarized signature, and a letter in response from the TSP, explaining why they were exempt from such a requirement. Then, on Jan. 7, I received a statement generated automatically by the bank, detailing the renewal of the traditional IRA at the bank for another year.
I called the bank’s complaint line Jan. 9, and tried to get some explanation. All they did was put me in contact with the same local vice president with whom I had been dealing. My husband brought copies of the most recent documents to the local bank and spoke to the vice president. She said not to worry about the renewal notice because the date of the transfer request took precedence. She then called the IRA division again, and also sent them copies of the recent documents. She assured my husband that the transfer would take place “by the end of the week.” Well, here it is the end of the week. Has the transfer taken place? No.
Do I have any recourse from what I now must conclude is the “stonewalling” of the IRA division of my bank? Is what they are doing illegal, as well as highly unethical? Do you have any advice for me?
A. I’m financial analyst and planner, not a lawyer, so I can’t tell you what legal recourse you may have. Banks are regulated by the states, so you may give your state’s financial regulators a call. The kind of nightmare that you’ve described is hardly unusual in my experience, however. Banks, brokers and basically all big financial firms are in it for their shareholders and they hate to give up your money without a fight. You can thank your elected representatives for the lax regulation of banks.