National Life Group's Bad Distribution Policy

Automatic 45 Delay On All Check Requests In Good Order

I recently helped a client move their 403(b) money from National Life Group’s Life of the Southwest to a rollover IRA. The money hasn’t moved yet and the reason will probably not surprise you, but it should make you mad.

I managed to submit all the paperwork (trust me, it’s a lot) correctly the first time (not a simple feat), but the money didn’t move. My client and I checked the account online and the funds were still there. I was a bit perplexed, perhaps I missed something.

My client and I decided to call National Life Group to see what the hold up was. We were told that the rollover request was “In Good Order,” meaning we had submitted everything correctly. I asked the only necessary question - “if the request is in good order, why hasn’t a check been cut?” The answer is got was stupid. I was told that all distribution requests (I assume this excludes loans and hardships) have an automatic 45 day delay before the check is released.

I didn’t believe the rep. I’ve moved money from National Life Group before and while it wasn’t easy, I don’t ever recall a 45 delay AFTER the request was approved. The representative was adamant that this is the policy, 45 days, no exception.

I’m almost positive this practice is illegal, however since it’s a fixed annuity and in a 403(b), it may be exempt from some insurance and annuity laws. Either way, I’ll be helping my client file a complaint against National Life Group.

Scott Dauenhauer, CFP, MPAS