I don’t suspect there are a lot of US Citizens turned Canadian permanent residents who have multiple contracts within a 403(b) account that they are looking to consolidate, but just in case I’ll share my experience here.
I worked for 11 years at an employer that offered a 403(b). Over those 11 years, the offerings changed, so I ended up with 4 different contracts in my account, all with the same investment company. I wanted to consolidate my contracts after I left that employer, in the interest of both simplifying things and lowering my expense ratios.
My four contracts came in two types: two of them were made up of my employer’s contributions, and two of them were made up of my contributions. The investments offered in each were similar, but the options were better in the ones funded by my contributions.
I called customer support for my account and first confirmed that I would be able to keep my account open and trade in it normally with a Canadian mailing address. I was told that some funds might not be available, but the funds that I was interested in would be. They also told me that, with a foreign mailing address, I would be unable to use their advising services. This is fine, as I have never used that anyway. Note: if you find that you are NOT able to have a Canadian mailing address with your 403(b) provider, you might want to roll it over into a traditional IRA with a company that is more Canadian-friendly.
The second thing I confirmed was that I could combine the contracts. In other words, I needed to know if any of my contracts were eligible to receive rollovers after I was no longer employed. Fortunately for me, the only one of my four contracts that could do that is also the one with the best investment options.
So I updated my mailing address to Canada. After updating my mailing address, I had to go through an attestation process for each contract. It was a simple one question web form — I just had to attest to the fact that I had earned the money in that contract while working in the US. Once I did that, I was able to trade in each contract normally. The funds available to me may have been slightly restricted, but I didn’t notice any obvious changes.
After that, I was able to combine my two employee-funded contracts together using the rollover process on the website. I set the percentages for how I would like that money invested, and it all happened at the end of the business day.
For the employer-funded contracts, I have to wait until 90 days after I left the company. Then, I have to fill out two forms with my former employer to get a certificate showing that I am no longer employed and am able to move this money. After I send that certificate to my investment company, I will be able to roll the other two contracts over as well.
This will ultimately amount to a small savings for me in terms of expense ratios — the funds in my employer plans have an expense ratio around .24, while the funds in my employee-funded contract are closer to .05. It will also bring me some simplicity, as my holdings at this particular investment firm will drop from 10 different funds down to 3.
So there you have it — if you find yourself wanting to consolidate contracts within a 403(b), don’t let your Canadian residency stop you. Confirm with your investment company that 1) you can have a Canadian mailing address and 2) at least one of your contracts can receive the rollover and you should be on the road to a more simplified account.