NUA Distribution at Voya Financial: Step-by-Step Process

Voya Financial (formerly ING U.S., rebranded in 2013) administers 401(k), 403(b), 457(b), and other defined contribution retirement plans for thousands of employers across the United States, with a particularly significant presence in large corporate, government, healthcare, and educational plan sponsors. If your employer stock is held in a Voya-administered 401(k) plan, this guide covers the specific mechanics of executing an NUA election: how to find your cost basis on the myVoya participant portal, what to request when you call, why you must open an outside brokerage account to receive shares in a taxable account, the government-sector 457(b) trap, and how to verify your 1099-R Box 6 after year-end. This is not investment or tax advice for your specific situation.

Voya Financial and the NUA process

Voya Financial provides recordkeeping, plan administration, and participant services for defined contribution retirement plans of all sizes. Voya was formerly known as ING U.S. and prior to that operated under the ING Life Insurance and Annuity Company (ILIAC) and ReliaStar Financial Corp. brands; the full transition to the Voya name was completed in 2014. Participants access plan information through the myVoya participant portal at voyaretirementplans.com (redirects to the myVoya login), where account balances, investment allocations, contribution history, and cost basis information for employer stock positions are available.

As an insurance-company-heritage recordkeeper — Voya's roots are in ING's insurance operations — Voya's retirement plan representatives are oriented around standard rollover IRAs and default distribution paths. In-kind employer stock transfers for NUA purposes are a non-standard transaction that requires routing to a specialist or complex-distribution team. Arriving at the call with the correct terminology and statutory authority matters for getting the distribution processed correctly.

The most important question to answer before doing anything else: Voya administers 401(k), 403(b), and 457(b) plans, and has a large presence in government, healthcare, and education sectors where 457(b) and 403(b) plans are common. Under IRC § 402(e)(4), the NUA election applies to qualified employer plans — 401(k), profit-sharing, stock bonus plans, and ESOPs. A 457(b) governmental plan and a 403(b) tax-sheltered annuity are both excluded from the NUA rules. If you work or worked in a government entity, public school, university, hospital system, or non-profit organization with a Voya plan, there is a meaningful probability it is not a 401(k). Confirm your plan type before modeling any NUA strategy.

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

Voya Financial administers retirement plans across a wide range of employer types — for-profit corporations (usually 401(k)), state and local government entities (often 457(b)), public school districts (often 457(b) or 403(b)), hospitals and healthcare systems (often 403(b)), universities and educational institutions (often 403(b)), and non-profit organizations (often 403(b) or 457(b)). The myVoya participant portal experience is similar across plan types, and the ING-to-Voya rebranding means some older statements still show legacy plan names that don't clearly indicate plan type.

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 457(b) governmental plan (authorized under IRC § 457(b)) and a 403(b) tax-sheltered annuity (authorized under IRC § 403(b)) are both explicitly excluded from the NUA rules.

• Log in to the myVoya participant portal at voyaretirementplans.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 Voya'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), a 403(b) tax-sheltered annuity under IRC § 403(b), or a 457(b) governmental deferred compensation plan under IRC § 457(b)?" Any representative can answer this factual question.
• If you work or worked for a government entity, public school, university, hospital, or non-profit organization, confirm the plan type before taking any action. Both 457(b) and 403(b) plans are ineligible for NUA treatment.

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

Voya Financial Advisors is a registered broker-dealer and investment advisory subsidiary of Voya Financial, but it is not a direct consumer retail brokerage where plan participants can open individual taxable brokerage accounts online and hold employer stock shares. 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 Voya 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 Voya.
• 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 Voya. 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 Voya 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 myVoya 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 myVoya 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 Voya 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 Voya was not always the recordkeeper — particularly if your plan was previously with ING, ING Life Insurance and Annuity Company (ILIAC), ReliaStar, or another predecessor — ask explicitly whether cost basis records are complete and lot-level for all contribution periods. See the ING-era basis records section below for the specific risks.

Step 4 — Call Voya's participant services line

In-kind employer stock distributions for NUA purposes must be initiated by phone — not through the myVoya portal self-service distribution flow. The participant services number is available on the Voya website under "Contact Us" or on your most recent plan statement. Request the Voya Retirement Plans participant services line for your employer's plan, not the Voya Financial Advisors investment advisory line — Voya has multiple business lines and the retirement plan recordkeeping team is the correct contact for in-plan distribution requests.

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 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 Voya has no consumer retail taxable 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 Voya provides.

Voya 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. Voya 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 Voya to provide written confirmation of every instruction — through the myVoya 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 Voya 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 Voya and request confirmation that both legs will complete before year-end. Build in at least 10 business days of buffer before end of year.

After both legs settle, verify completion: your Voya 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 Voya 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 Voya

Voya 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 Voya'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.

457(b) and 403(b) plan-type trap: the most common Voya NUA mistake

Voya Financial is one of the largest providers of 457(b) governmental retirement plans and 403(b) plans in the United States, serving state and local governments, public school districts, universities, hospital systems, and non-profit organizations. In terms of participant count, a significant portion of Voya's defined contribution business is in plan types that are explicitly ineligible for NUA treatment.

Under IRC § 402(e)(4), the NUA election is unavailable to 457(b) and 403(b) plan participants. 457(b) plans are authorized under IRC § 457(b) and qualify as deferred compensation plans, not as "qualified employer plans" under § 401(a). 403(b) plans are authorized under IRC § 403(b) as tax-sheltered annuities and are also explicitly excluded from the NUA rules. Sectors where Voya commonly administers ineligible plan types:

• State and local governments (frequently 457(b) — ineligible)
• Public school districts and educational authorities (frequently 457(b) or 403(b) — both ineligible)
• Universities and colleges (frequently 403(b) or 457(b) — both ineligible)
• Hospital systems and healthcare networks (frequently 403(b) — ineligible)
• Non-profit and charitable organizations (frequently 403(b) or 457(b) — both ineligible)
• For-profit corporations of all sizes (typically 401(k) — NUA eligible)

Confirm your plan type in the myVoya 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 type is significant. The same participant portal serves all plan types, so the interface alone does not tell you whether you are in a 401(k), 403(b), or 457(b) plan.

ING-era cost basis records: the long-tenure risk

Voya Financial was ING U.S. until 2013. Before the ING U.S. name, the retirement recordkeeping operations were conducted under ING Life Insurance and Annuity Company (ILIAC), ReliaStar Life Insurance Company, and other predecessor entities following a series of acquisitions dating back to the late 1990s. For plan participants with 15 or more years in a plan that was at some point administered by one of these legacy platforms, there is a real risk that cost basis records for employer stock contributed in the earliest years are incomplete, estimated, or were not fully migrated during platform transitions.

Before relying on the cost basis figure displayed in the myVoya portal, verify its completeness:

• Ask Voya participant services: "Are the cost basis records for my employer stock complete and lot-level for all years of plan participation, including periods before the Voya rebranding and any prior ING, ILIAC, or ReliaStar recordkeeping periods?"
• If your plan was administered by ING or a predecessor before transitioning to what is now the myVoya platform, ask whether basis records from those periods were migrated in full, estimated, or reconstructed.
• Request written confirmation of the cost basis figure and its completeness before initiating any distribution. A higher-than-actual reported basis understates the NUA amount in Box 6 and increases your ordinary income tax in the distribution year.
• For plans that were transferred to Voya from other recordkeepers — not just ING predecessors but any prior plan administrator — the same question about basis completeness applies.

Incomplete basis data affects the accuracy of the NUA calculation in both directions. 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-tenure plan participants with Voya or any of its predecessor entities.

Common Voya-specific pitfalls

Default routing toward IRA rollover of all assets

Voya's default distribution processing routes all plan assets to an IRA rollover unless the participant specifically requests otherwise. A representative who is not familiar with in-kind employer stock distributions may route you toward "rolling everything to a rollover IRA" without flagging the in-kind requirement. If employer stock ends up in an IRA — even briefly — the NUA election is permanently forfeited on those shares under IRC § 402(e)(4)(B).¹ The IRS does not provide an exception for rollovers made in error. Make clear from the first moment of the call that you are requesting an in-kind transfer of employer stock to a taxable brokerage account, not an IRA rollover of employer stock.

No Voya retail taxable brokerage — external DTC transfer required

Unlike Fidelity, Schwab, or Merrill Lynch — which maintain consumer retail brokerage accounts accessible to both workplace plan participants and retail investors — Voya Financial Advisors is a broker-dealer and registered investment advisor that works through financial advisors. There is no "Voya taxable brokerage account" a participant can open online in 15 minutes to receive in-kind employer stock shares. You must establish a taxable individual brokerage account at a separate firm before initiating the NUA distribution. Have that account's 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 same-custodian transfer. The 3–7 business day DTC settlement window in late December can push 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

Voya's distribution forms and online distribution requests may default to cash-out or IRA rollover processing of all plan assets without a separate in-kind transfer option visible in the standard flow. If a representative processes the request as a standard IRA rollover of all assets, 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.

ING-era cost basis gaps for long-tenure participants

As described above: participants who have been in a Voya-administered plan since the ING, ILIAC, or ReliaStar era may have incomplete cost basis records. Do not proceed with an NUA distribution based on a portal-displayed basis figure without first confirming with Voya that the figure is complete and lot-level for all years of plan participation. Missing basis records from the earliest years of plan participation — when employer stock may have had a much lower market value — can significantly understate the true cost basis and distort the NUA calculation.

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 · Transamerica.