X Cell Communications
Added on -, by Reviewer8738796
I have reviewed the response offer made by the business in reference to complaint ID [redacted], and have determined that this proposed action would not resolve my complaint. For your reference, details of the offer I reviewed appear below.
1. April 2015 Contract prepared by [redacted]- The attached contract states that sale (of the house that [redacted] owns and was attempting to sell to me) is was as follows:Sell subiect to buyer convertinq CSC Retirement account to a self-directed account which allows the purchase of real estate. Buyer has provided proof of funds from this account. Buyer would like quick settlement; date to be determined based on self-directed IRA's settlement of transferred funds. 2. I contacted CSC, the company that holds the funds. They told me the following (which I already had relayed to Mr. [redacted]):- Former employees are not allowed to borrow from the plan to purchase houses or for any other purpose.- The rep said they are not allowed to write letters for individuals, but anyone (and I explained the current situation) could call and ask general questions and that they would confirmed that I would have been told that when I called about using the money to purchase a home. - I was told that anyone who wanted to validate that could call ###-###-####. 3. Conversion to a self-directed account- I contacted various firms asking if I could set up a self-directed IRA and use the CSC funds to purchase a primary residence. I was told that the most I could do was to take a loan for up to 50% of the funds in the account. At the time I submitted the contract to Mr. [redacted] the account had a vested balance of $102,233.88. (Please see attached file with the contract document. It shows the CSC proof of funds that I submitted to Mr. [redacted] in April.) I was told that the max loan that I could take for use on a residence would be 1/2 the balance of the account (that would have been minus fees for setting up the self directed account and other fees on the CSC end for the rollover). I was told that the max amount that I could take, under any circumstances, was $50K (but less than that would have been left after I paid fees). I also would have had to leave some money in the account for self-directed IRA account fees. CSC had advised me, that even if I were a current employee and eligible to take a loan, that I would have been subject to those same rules since they are set at the federal / IRS level and not by individual companies. 4. The price of Mr. [redacted]s house was $72,900. So, I was told that I could not, by law, take a loan to purchase the house, because IRS rules limited the total amount for a primary home purchase (regardless of how much was in my account) to $50K max. Therefore, I was told even if I converted the account to a self-directed IRA, I would not legally be able to purchase Mr. [redacted]'s house as my primary home. So, I left the funds in my CSC account. They are still there (but the account has dropped 6%), so now the balance is lower that what is reflected on the attached document. 5. When I called the CSC rep, I was told to download and attached the following two documents from their website:- CSC Map Loan Procedures (attached as CSC_MapLoanProcedures.pdf)- CSC Map Summary Plan Description and Prospectus (attached as CSC_MAPProspectus.pdf) The rep said these two documents are their official (aside from being willing to answer general questions and verify the information if called) response to the request that they provide a written response about my case in particular. Again, that number is ###-###-####. If called, the rep said CSC would verify that the policy is not write a letter or give specific information about any one individual and that they would verify that I would have been advised as I have relayed here in. And they would relay the information (that I have shared herein as well as with Mr. [redacted]) about the IRS rules and why the funds could not be used for me to purchase his home as a primary residence. The attached CSC documents state that former employees cannot borrow from accounts. The max amount limits etc. also are explained. The self-direct IRA companies that I contacted follow the same rules regarding the max amount to be used for a primary residence being set to 1/2 of the value to the account not to exceed $50K. Again, I was told that ALL companies do this, because this is a law set by the federal government / IRS and that there were no exceptions made to it. 6. IRS Website The IRS Website says the following:3. Under what circumstances can a loan be taken from a qualified plan?A qualified plan may, but is not required to provide for loans. If a plan provides for loans, the plan may limit the amount that can be taken as a loan. The maximum amount that the plan can permit as a loan is (1) the greater of $10,000 or 50% of your vested account balance, or (2) $50,000, whichever is less. For example, if a participant has an account balance of $40,000, the maximum amount that he or she can borrow from the account is $20,000.