dunroving

I wasn't sure if this was best posted in the US forum or here, as IRAs have been discussed a fair bit in both places.

I am trying to open a Roth IRA with my retirement scheme provider in the US (have been with them since 1996). I want to rollover my 401k to a Roth IRA. So, no new payments, just shuffling my money about. In order to do this, I have to first open an IRA (with the same company).

I am hitting the "Patriot Act" wall. Below is part of the most recent message I got:

"Thank you for your email inquiry. It is my pleasure to assist you.

The USA Patriot Act requires you to provide a current physical residential address in the U.S. when you open an investment account such as a Roth IRA. It should be the address where you reside and would receive correspondence. "

- I can not find ANYWHERE a requirement of the Patriot Act that you live in the US. In fact, I have found other references to the Patriot Act on other providers' Web sites that state ONLY that a requirement of the Patriot Act is that you confirm your identity (via passport, SS number, drivers' license, etc.) The main purpose seems to be that they want to confirm that you are who you say you are and you are not a money launderer or a t*****ist.

- has anyone else faced a similar situation after leaving the US, and if so, did you find a way around this? It seems ridiculous that I have lived and worked in the US for about 20 years, and this company has had all sorts of ID evidence from me before.

I could say more, but maybe will just wait to see what replies I get.

fulwood

I will eventually convert my IRA to a Roth. if you want I'll call USAA later today as they should know this stuff with military deployments etc. i'll see what i can find out.

lgabriel73

Are you trying to apply on line? If so this could be where the problem lies. A lot of financial institutions from what i have been reading do require a physical US address when applying on line. Try calling to set up an account, you may have a different result.

fulwood

Okay. Dunroving just spoke with USAA. You cannot convert your IRA to a Roth once living overseas. If you had opened one before you left it would be different matter, you could transfer money to Roth at any time whilst in UK. USAA referred to Office of Foreign Assets Control if you can find it. Hope this helps.

dunroving

Thank you, any information would be appreciated. I am not sure if the situation would be the same if I were trying to roll over from a regular IRA to a ROTH, but I think so. It seems to be "any new account"

Well, I am communicating via secure message from within my account. I have not completed an online application, for the reasons you mention. Frustratingly, I was at TIAA-CREF headquarters in person last year and could have tried back then. At that time, I hadn't read Nun's clever plan about rolling over to a ROTH from a regular IRA or 401k, etc.

If I don't get anywhere, I may call when I am in the US in May. Unfortunately I can't get over to their HQ in person.

I don't want to get into a strop with them, because that will get me absolutely nowhere fast, but they seem to be interpreting the Patriot Act incorrectly.

dunroving

Bugger, just seen that. Thank you for calling them to ask.

It seems a bit like the whole "you can't open a UK bank account if you live overseas" situation (i.e., there really isn't any reason to refuse a non-resident UK citizen the right to open a bank account, in fact plenty of people on here have managed to do just that).

It seems ridiculous that I could move back to the US for a year to work, open a Roth IRA and then move back to the UK and continue to transfer to it, but I can't open a new Roth IRA with my existing provider. In these situations, I just want to know, "Why?"

Pulaski

Can you not open a UPS store mailbox (street address, with the box marked as a "Unit" or "Apt") and then open the account using that address? Would they otherwise know that you're not actually in the US?

dunroving

A good friend would let me use his residential address, I'm sure. I thought about this option but was concerned about the potential consequences if it went pear-shaped, for him and for me. It is the Patriot Act, after all. In that situation, what is the worst that could happen, do you think?

fulwood

i think it's all to do with Office of Foreign Assets Control. I know it doesn't make sense. Well I have learned what to do myself when and if I ever move back for good. But no matter what will convert to Roth over time. I don't think you'll get a good answer as to why..

JAJ

Nothing to do with the Patriot Act, or the Office of Foreign Asset Control. However a lot of the time these are either poorly understood, or can function as convenient excuses if they just don't want to do business with non-residents.

Perhaps ask them to point out the particular section of the Patriot Act they are concerned about? The expectation is that following this question, you may get no reply. However there is always the possibility of a more meaningful response.

Also perhaps make use of the following resource, even if not a U.S. citizen:
http://americansabroad.org/issues/ba...ot-act-update/

Pulaski

Well it's hard to say what could go wrong, which is why I wouldn't involve a friend in the scheme, because you just don't know where being "an accessory" might lead.

To you individually, I don't imagine much downside risk to opening a new account with an investment manger that you already have an account with, and in fact the USA PATRIOT Act has all sorts of exceptions in the rules for established relationships. That you're an established customer should also sweep aside most of the concerns that OFAC might have too. Unless I am missing some nuance, the whole thing seems to be a storm in an administrative teacup.

I'll be interested to see what anyone else says about this question. But as of right now, in your situation, I would use a UPS Store mail box as my residence for the purposes of opening the new account.

You are exactly right. It is a fairly effective strategy to avoid most of the risk of fines or other sanctions, for financial services businesses to more or less refuse to do business with people who are outside the US, or not in the US legitimately. ..... Further to my advice above, it is difficult for a large business with millions of customers and likely hundreds of new customers every week, to do anything but a cursory check on their identity. So if you have an SSN, a name and date of birth linked to that, and a non-PO Box mailing address, opening a new account is rarely a problem, opening a new account as an existing customer is unlikely, IMHO, to attract a second glance.

dunroving

Those links look very useful. I may take the next step of using the Patriot Act to make my case. As the information suggests, this is just a convenient way of banks avoiding awkward situations and potential fines.

Come on, this is my pension we're talking about!!

dunroving

I wondered if anyone has experience or knowledge of how this information is used by the institutions? It occurred to me that if this is associated with something like a credit check (procedurally, I mean; I know it isn't a credit check), then using a mailbox or a friend's address wouldn't work.

Surely if the goal of the Patriot Act is to "look into you" to check you are not a money launderer (or worse), surely they will check any address you give them against public records (property tax, other paper trail that you live/lived at this address)?

fulwood

goodness knows why really you can't convert your OWN money to a Roth..

durham_lad

It is very disappointing to hear that your current provider won't allow you to open a ROTH IRA, but I discovered that the company managing a 401k may have a different set of rules to the company itself. My 401k provider was Schwab and when I wanted to roll it over to an IRA with Vanguard I talked with Schwab and Vanguard but when it came to doing the actual transfer the Schwab representative was somewhat surprised to discover that electronic transfer of funds was not allowed. He told me that Schwab didn't have such restrictions but the rules of the 401k itself said that only a check mailed to my address was allowed. Schwab mailed me a check, made out to Vanguard, payable to a new IRA account that I had just opened, and I then immediately mailed the check to Vanguard. (This process ensured no penalties for early withdrawal).

I talked to Vanguard in January about our move back to the UK and they told me that as long as our accounts were set up ahead of time then we could keep our accounts when the address was changed to a UK address.

I didn't ask if they would accept a US PO Box as an address, but does this restriction mean that folks who live in their RV, traveling around the country are unable to open new accounts with financial institutions?