NUA Distribution at Transamerica: Step-by-Step Process

Transamerica Retirement Solutions (a Transamerica company, part of Aegon, headquartered in Cedar Rapids, Iowa) administers 401(k), 403(b), and other defined contribution retirement plans for thousands of employers across the United States. If your employer stock is held in a Transamerica-administered 401(k) plan, this guide covers the specific mechanics of executing an NUA election: how to find your cost basis, what to request when you call, why you must open an outside brokerage account to receive shares (Transamerica has no consumer retail brokerage), and how to verify your 1099-R Box 6 after year-end. This is not investment or tax advice for your specific situation.

Transamerica and the NUA process

Transamerica Retirement Solutions provides recordkeeping, plan administration, and participant services for defined contribution retirement plans of all sizes, with a significant presence in small-to-midsize companies as well as healthcare, education, and insurance-industry employers. Participants access plan information through the Transamerica participant portal at transamerica.com/retirement (also accessible via my.transamerica.com), where account balances, investment allocations, contribution history, and cost basis information for employer stock positions are available.

As an insurance-company-based recordkeeper — Transamerica's parent is Transamerica Life Insurance Company, part of Aegon — Transamerica's retirement plan representatives are oriented around annuity products, rollover IRAs, and standard distribution paths. In-kind employer stock transfers for NUA purposes are a non-standard transaction that requires being routed to a specialist or complex-distribution team. Arriving at the call with the correct terminology and statutory authority is important for getting the distribution processed correctly.

The most important question to answer before doing anything else: Transamerica administers both 401(k) and 403(b) plans. Under IRC § 402(e)(4), the NUA election applies to qualified employer plans — 401(k), profit-sharing, stock bonus, and ESOP plans. A 403(b) plan (a tax-sheltered annuity) is explicitly excluded. If you work or worked in healthcare, a hospital system, a university, or a non-profit organization and your plan is with Transamerica, there is a meaningful probability it is a 403(b) plan. Confirm your plan type before modeling any NUA strategy.

Step 1 — Confirm your plan type is a 401(k)

Transamerica administers retirement plans across a wide range of employer types — for-profit companies (usually 401(k)), healthcare and hospital systems (often 403(b)), universities and educational institutions (often 403(b)), non-profit organizations (often 403(b) or 457(b)), and insurance-industry employers. Because the participant portal experience is similar across plan types, and because the Transamerica brand is associated with insurance and annuity products that span all these sectors, participants sometimes assume they have a 401(k) when they actually hold a 403(b) or 457(b). That assumption, if wrong, permanently forfeits the NUA opportunity.

Under IRC § 402(e)(4), the NUA election applies to "qualified employer plans" — broadly, plans qualifying under IRC §§ 401(a) or 403(a), including 401(k) plans, profit-sharing plans, stock bonus plans, and ESOPs. A 403(b) plan (a tax-sheltered annuity plan) is authorized under IRC § 403(b) and is explicitly excluded from the NUA rules. The same exclusion applies to 457(b) governmental plans.

• Log in to the Transamerica participant portal at transamerica.com/retirement or my.transamerica.com and navigate to your plan summary or account overview. The plan type is typically labeled as "401(k) Plan," "403(b) Plan," "457(b) Plan," "Profit Sharing Plan," or similar language near the plan name.
• Check your employer's benefits enrollment materials or your most recent plan statement. The plan type will be identified in the plan name or description section.
• If uncertain, call Transamerica's participant services line and ask directly: "What type of retirement plan do I have — is it a 401(k) qualified plan under IRC § 401(a) or a 403(b) tax-sheltered annuity under IRC § 403(b)?" Any representative can answer this factual question.
• If you work or worked in healthcare, education, or at a non-profit and your plan is with Transamerica, confirm the plan type before taking any action. The NUA election is unavailable for 403(b) plan participants.

Step 2 — Open a taxable brokerage account at an outside firm

Transamerica does not operate a consumer retail brokerage. There is no "Transamerica brokerage account" where plan participants can hold individual shares in a taxable account. For an NUA election, the in-kind employer stock must be transferred via the Depository Trust Company (DTC) network to a taxable individual brokerage account you establish at a separate firm — Fidelity, Schwab, Merrill Edge, or another DTCC-connected broker. Open this account before calling Transamerica so you have the account number and DTC transfer instructions ready at the time of the call.

• The receiving account must be a taxable individual brokerage account — not an IRA, Roth IRA, rollover IRA, or any tax-advantaged account. If employer stock reaches an IRA even briefly, the NUA election is permanently forfeited on those shares under IRC § 402(e)(4)(B).¹ Specify "taxable individual brokerage account" explicitly when instructing Transamerica.
• Good receiving brokers: Schwab One individual account (DTC participant # 0164), Fidelity individual taxable account (DTC participant # 0226), Vanguard individual account (DTC participant # 0062), Merrill Edge individual account (DTC participant # 8862), or any other DTCC-connected brokerage. Opening an account takes 10–15 minutes online.
• Have the account number and the receiving broker's 4-digit DTC participant number ready before calling Transamerica. Your receiving broker can provide its DTC participant number via account support or on its website under "transfer instructions."
• For closely held or restricted employer stock, contact both Transamerica and the receiving broker in advance. Privately held shares may not be eligible for standard DTC transfer and may require special arrangements. Confirm the plan document allows in-kind distribution of private shares.

Step 3 — Find your employer stock cost basis in the Transamerica portal

The NUA cost basis is the plan's acquisition cost — what the plan paid when employer stock was contributed to your account over the years. This is often far below today's market price for long-tenure employees, which is the source of the NUA benefit.

• Log in to the Transamerica participant portal and navigate to your account detail or investment summary. Look for the employer stock position and any associated "cost basis," "acquisition cost," or "original value" figure.
• Confirm that the figure represents the plan's acquisition cost, not the current market value. The plan cost basis for NUA purposes is the price at which shares were allocated to your account through employer contributions — not mark-to-market or estimated average cost.
• If cost basis information is not clearly displayed, or if the displayed figure appears estimated: call Transamerica participant services and ask specifically for the "plan cost basis for employer stock for NUA purposes under IRC § 402(e)(4)." Request written confirmation of the cost basis figure before initiating any distribution.
• If you have been in the plan for many years and Transamerica was not always the recordkeeper — or if Transamerica has migrated its internal recordkeeping platform — ask explicitly whether cost basis records are complete and lot-level for all contribution periods. See the platform migration section below for the specific risks.

Step 4 — Call Transamerica's participant services line

In-kind employer stock distributions for NUA purposes must be initiated by phone — not through the Transamerica portal self-service distribution flow. The participant services number is available on the Transamerica website under "Contact Us" or on your most recent plan statement. Request the Transamerica Workplace Retirement line (for employer-plan participants), not the individual life insurance or annuity product lines — Transamerica has multiple business lines and the retirement plan services team is the correct contact.

When you reach a representative, ask for a "distribution specialist" or "complex distribution team." In-kind employer stock transfers are non-standard and should be handled by someone experienced with them. If the initial representative defaults to a standard IRA rollover or cash distribution without acknowledging the in-kind requirement, ask to escalate before providing any distribution instructions.

Use this specific language when you reach the right representative:

• "I want to take a lump-sum distribution triggered by my separation from service [or age 59½ / disability / participant death — whichever qualifying event applies to your situation]."
• "I want to distribute the employer stock in-kind — as shares transferred to my [broker name] individual taxable brokerage account, not sold. This is a taxable brokerage account, not an IRA."
• "I want to roll the remaining non-stock plan balance over to an IRA at [IRA custodian and account number]."
• "I am electing Net Unrealized Appreciation treatment on the employer stock under IRC § 402(e)(4)."

Using the specific statutory citation, "lump-sum distribution," "in-kind," and "taxable brokerage account" signals to the representative that this is an NUA election requiring specialist processing. Do not proceed with a representative who is routing toward a standard rollover-everything instruction without acknowledging the in-kind transfer requirement.

Step 5 — Provide the external DTC transfer instructions

Because Transamerica has no retail brokerage, the in-kind employer stock must travel via the DTC network to your outside taxable brokerage account. Have the following ready when you call:

• Receiving broker's DTC participant number — the 4-digit DTCC identifier. Schwab: 0164; Fidelity: 0226; Vanguard: 0062; Merrill Edge: 8862. Other brokers provide their DTC participant number via account support.
• Your account number at the receiving taxable brokerage — the individual (non-IRA) account opened in Step 2.
• Company name, ticker symbol, and number of shares to be transferred in-kind.
• Explicit written instruction that the receiving account is a taxable individual brokerage account, not an IRA or Roth — this should appear in any written confirmation Transamerica provides.

Transamerica will initiate the DTC transfer from the plan's custodial bank to your outside brokerage. Confirm the expected settlement timeline — typically 3 to 7 business days — and explicitly flag the December 31 same-year deadline if you are initiating in Q4. Transamerica has no control over settlement timelines at the receiving broker, so build in adequate buffer time for late-year distributions.

Step 6 — Get written confirmation of all distribution instructions

Before ending the call, ask Transamerica to provide written confirmation of every instruction — through the plan portal secure messaging, by email, or by mail. The written confirmation should specify:

• That the employer stock is being transferred as shares in-kind to a taxable brokerage account via DTC transfer (not liquidated to cash, not included in an IRA rollover)
• The receiving broker's name, DTC participant number, and your account number at that broker
• That the remaining non-stock plan balance is being rolled over to an IRA (with the receiving IRA custodian and account number)
• The qualifying triggering event for the lump-sum distribution
• Expected completion timelines for both distribution legs

Written confirmation is essential documentation if either leg is processed incorrectly — employer stock liquidated to cash, shares routed to the IRA instead of the taxable account, or the December 31 deadline missed. It also serves as documentation if Transamerica issues an incorrect 1099-R requiring correction before your tax filing.

Step 7 — Complete both legs before December 31

The lump-sum distribution requirement under IRC § 402(e)(4) means the entire plan balance must leave the plan within a single calendar year. Both legs must complete before December 31:

• The in-kind employer stock DTC transfer to your external taxable brokerage account
• The IRA rollover of the remaining non-stock plan balance to your receiving IRA custodian

External DTC transfers take 3–7 business days to settle at the receiving broker. IRA rollovers to external custodians typically take 3–10 business days. If initiating in November or December, explicitly raise the December 31 deadline with Transamerica and request confirmation that both legs will complete before year-end. Because Transamerica has no control over settlement timelines at the receiving broker, build in at least 10 business days of buffer before end of year.

After both legs settle, verify completion: your Transamerica plan balance should reach $0, shares should appear in your external taxable brokerage account, and the rollover should be visible in your IRA. Follow up with both Transamerica and the receiving broker before December 31 if the DTC transfer hasn't appeared within the expected window.

Step 8 — Review your 1099-R from Transamerica

Transamerica will issue a Form 1099-R in January of the year following the distribution. For an NUA election, verify these boxes are populated correctly:²

If Box 6 is missing or Box 2a equals Box 1 (meaning the full fair market value is taxed as ordinary income), the distribution was processed without recognizing the NUA amount. Do not file your return with an incorrect 1099-R. Contact Transamerica's plan services team to request a corrected form. See the NUA tax reporting guide for how to report the distribution on Schedule D in both the distribution year and the sale year.

403(b) plan-type trap: the most common Transamerica NUA mistake

Transamerica is one of the largest providers of 403(b) retirement plans in the United States, serving hospital systems, universities, school districts, non-profit organizations, and insurance-industry employers. The 403(b) plan structure is deeply embedded in Transamerica's client base — so much so that participants in qualifying 401(k) plans administered by Transamerica sometimes assume all Transamerica plans work the same way, while 403(b) participants sometimes assume they have a 401(k).

Under IRC § 402(e)(4), the NUA election is unavailable to 403(b) and 457(b) plan participants. 403(b) plans qualify under a different IRC section (§ 403(b)) and are explicitly excluded from the NUA rules. Sectors where Transamerica administers predominantly 403(b) plans:

• Hospitals and healthcare systems (frequently 403(b))
• Universities and educational institutions (frequently 403(b))
• Public school districts (frequently 403(b) or 457(b))
• Non-profit and charitable organizations (frequently 403(b))
• Religious organizations (frequently 403(b))
• For-profit companies of all sizes (typically 401(k) — NUA eligible)

Confirm your plan type in the Transamerica portal or by calling participant services before modeling any NUA strategy. If you work or worked in any of the first five sectors, the probability of being in a non-qualifying plan is significant.

Common Transamerica-specific pitfalls

Insurance-company rep orientation — routed toward annuities or standard IRA rollover

Transamerica's core business is insurance and annuity products, and many participant services representatives are oriented around annuity rollovers, insurance product conversions, and standard IRA rollover paths. A representative who is not familiar with in-kind employer stock distributions may route you toward "rolling everything to an IRA" or suggest converting the employer stock to a Transamerica annuity product. Neither option preserves NUA treatment — and an IRA rollover of the employer stock permanently eliminates the NUA election for those shares.¹ If the initial representative is not acknowledging the in-kind transfer requirement, ask to speak with a distribution specialist or complex-case team before providing any distribution instructions.

No Transamerica retail brokerage — external DTC transfer required

Unlike Fidelity, Schwab, Merrill Lynch, or Vanguard — which all offer both workplace retirement recordkeeping and consumer retail brokerage accounts — Transamerica does not operate a consumer retail brokerage where plan participants can hold individual shares in a taxable account. If you call Transamerica and ask to "transfer the shares to a Transamerica brokerage account," there is no such product. You must establish a taxable individual brokerage account at a separate firm before initiating the NUA distribution. Have the account information ready before calling — see Step 2.

External DTC transfer timeline vs. December 31 deadline

Because in-kind employer stock must travel through the DTC network to an outside brokerage, the settlement time is longer than an internal Fidelity-to-Fidelity or Schwab-to-Schwab transfer. The 3–7 business day DTC settlement window in late December can push the share arrival into January if you initiate too late. A transfer that settles January 2 instead of December 31 means the lump-sum distribution spans two calendar years — a potential disqualification of the NUA election for those shares. If executing in Q4, initiate the process in early November at the latest. Do not wait until mid-December.

Employer stock accidentally liquidated at distribution

Transamerica's default distribution processing for participant-initiated requests may route plan assets through a cash liquidation step before transfer. If a representative processes the request as a standard IRA rollover of all assets without flagging the in-kind employer stock transfer requirement, the employer stock will be sold to cash — and once liquidated, the NUA opportunity on those shares is permanently lost. Before any distribution form is confirmed, verify that the employer stock instruction reads "in-kind transfer of shares to taxable brokerage account" — not "liquidate and transfer" or "rollover." Check the receiving brokerage within 5–7 business days after the expected settlement date to confirm shares — not a cash wire — arrived.

Employer stock bundled into the IRA rollover leg

A common processing error at any custodian: when the non-stock plan balance is rolled to an IRA, employer stock is inadvertently included in the rollover instruction. Any employer stock that ends up in an IRA permanently loses NUA treatment for those shares, with no recourse.¹ After both legs settle, verify that the IRA received only non-employer-stock assets, and that the taxable brokerage account received actual shares in the correct quantity.

Cost basis records incomplete after platform migrations or plan provider changes

Transamerica has migrated its recordkeeping platform at various points over the past two decades, and many plans were transferred to Transamerica from predecessor recordkeepers over the same period. For long-tenured employees — particularly those with 20 or more years of plan participation — cost basis records for employer stock contributed in the earliest years of plan participation may be incomplete, estimated, or missing entirely if those records were not fully migrated from the prior recordkeeping system.

Before relying on the cost basis figure shown in the Transamerica portal, ask Transamerica participant services to confirm: "Are the cost basis records for my employer stock complete and lot-level for all years of plan participation, including any periods before the current recordkeeping system?" If there are gaps — particularly for contribution years before 2010 or before a plan provider transition — a fee-only NUA advisor can help reconstruct basis estimates from historic payroll data, plan contribution records, and available lot-level information.

Incomplete basis data affects the accuracy of the NUA calculation two ways: if the plan's reported cost basis is higher than the true basis, the 1099-R Box 6 NUA amount will be understated, and you will overpay ordinary income tax in the distribution year relative to your actual basis. If the reported basis is lower than the true basis, Box 6 will be overstated. Basis verification before executing is not optional for long-tenured employees.

After the transfer: next steps

Once employer stock appears as shares in your external taxable brokerage account:

• The NUA amount automatically qualifies as long-term capital gains when the shares are eventually sold, regardless of how long you hold them after distribution. Post-distribution appreciation above the NUA amount is short-term if sold within one year of distribution, long-term after one year. In most situations, holding at least one year after distribution converts all gains to long-term rates.
• Review your post-NUA diversification strategy — tranche selling to stay in the 15% LTCG bracket, direct charitable donation, DAF/CRT, and holding for estate step-up are all worth modeling before selling a large concentrated position.
• The Box 6 NUA amount is reported on Schedule D as a deemed long-term capital gain in the year of sale, not the year of distribution. See the NUA tax reporting guide for the full mechanics. An NUA-specialist tax advisor should review both the distribution year return and the first sale year return.
• Other custodian guides in this series: Fidelity · Empower · Vanguard · Schwab · Merrill Lynch · Principal · T. Rowe Price · Nationwide · John Hancock · Lincoln Financial.