How to Roll Over a 401A or 403 Retirement Account Into a BORSA

A BORSA account is a proprietary name established by the CPA firm, DRDA, LLC. It refers to a Business Owners Retirement Savings Account which follows guidelines set forth by the Employee Retirement Income Securities Act (ERISA) Section 408e which is enforced by the IRS. You can roll 401a or 403b assets into a BORSA to fund small business ventures while maintaining the tax-deferred status of an IRA.

Instructions

1. Establish a new corporation. You can do this with the Secretary of State in your resident state. Complete the application as well as the required documentation with the IRS to obtain an employer identification number (EIN). Use Form SS-4 to apply for the EIN.

2. Contact DRDA, LLC to open a BORSA account. Keep in mind that you can use any self-directed IRA firm or CPA firm familiar with ERISA Section 408e. Whoever you use, make sure they are able to properly complete all reporting and accounting of private stock transfers.

3. Fund the BORSA with a direct rollover. Complete the rollover package with your existing employer-sponsored plan administrator. A direct rollover sends funds directly to the new custodian and avoids the 20% automatic withholding requirement giving you access to 100% of the funds.

4. Transfer the cash from the BORSA into the new company bank account in exchange for private stock certificates naming the BORSA account as the owner.

Tips & Warnings

• You may continue to contribute to your BORSA plan on a regular basis, saving assets toward retirement while continuing to have fund accessible if you need to further capitalization for the company.

• The IRS allows many investment options in IRAs that aren't always offered by custodians. The BORSA is a specialized IRA.

References

• Benefits Link: ERISA in the US Code
• ICMarc: What is a 401(a) Plan
• DRDA: Client Services
• BORSA: How BORSA Works