The Rollover Funding Hub
Your dashboard includes a dedicated Rollover Funding Hub that guides you through the required steps, from account setup through capitalization.Phase 1 - C-Corp Bank Account
Open a business bank account for your C-Corporation before funds arrive. Any business bank works. Once your account is open, provide the required banking details securely in your dashboard so capitalization can be completed.Phase 2 - Custodian Account
Set up the receiving custodial account for the 401(k) plan trust. Nexus guides the setup, including the account title and plan trust details you need to provide. Once the account is open, provide the required account details securely in your dashboard.Phase 3 - Rollover Transfers
Initiate direct rollovers from your existing retirement custodians into the new 401(k) plan. If you’re consolidating multiple accounts, each transfer is tracked individually (source custodian, amount, status) and can be staggered as custodians process. The dashboard shows which transfers are pending, in transit, or received.Phase 4 - Capitalize
Once all rollover funds have arrived in the plan trust, the 401(k) plan trust purchases shares in the C-Corporation. The proceeds transfer to the C-Corp bank account as working capital. After capitalization is complete, compliance monitoring begins automatically.The Mechanics
New 401(k) Plan Established
The C-Corporation adopts a 401(k) plan with provisions allowing investment in employer stock (the company’s own shares).
Rollover Initiated
You request a trustee-to-trustee transfer (also called a “direct rollover”) from your existing retirement account to the new 401(k) plan. This is NOT a distribution - no check is made payable to you.
Funds Arrive in New Plan
The rollover amount lands in the new 401(k) plan’s trust account. This is a standard retirement-to-retirement transfer - no taxable event.
Stock Purchase
You direct the 401(k) plan to purchase shares in the C-Corporation at the documented transaction value. The plan becomes a stockholder.
Eligible Account Types
| Account Type | Eligible? | Notes |
|---|---|---|
| Traditional 401(k) | Yes | Most common source |
| Rollover IRA | Yes | Common if you’ve already left a prior employer |
| Traditional IRA | Yes | |
| SEP-IRA | Yes | |
| SIMPLE IRA | Yes | 2-year holding period must have passed |
| 403(b) | Yes | |
| 457 | Yes | Government/non-profit plans |
| Roth 401(k) | Generally no | Roth dollars generally do not work in the Nexus ROBS structure |
| Roth IRA | No | Already taxed - not eligible |
Multiple Accounts
If you have retirement funds spread across multiple accounts, each can roll over separately into the new 401(k) plan. The rollovers don’t need to happen simultaneously - they can be staggered as custodians process them.Key Tax Points
- No income tax is triggered on the rollover. This is a qualified trustee-to-trustee transfer.
- No early withdrawal penalty. The rollover moves funds between qualified plans rather than distributing funds to you personally.
- No age restriction. Unlike early distributions (which penalize before age 59½), rollovers can happen at any age.
- Reporting: The rollover is reported on your tax return (Form 1099-R from the sending custodian, Form 5498 from the receiving plan), but the taxable amount is $0.
Common Questions
What if my current employer doesn't allow in-service rollovers?
What if my current employer doesn't allow in-service rollovers?
If you’re still employed at the company sponsoring your 401(k), the plan may not allow rollovers while you’re still an active employee. Check with your plan administrator. If in-service rollovers aren’t allowed, you’ll need to separate from that employer first, then roll over.
Can I do a partial rollover?
Can I do a partial rollover?
Yes. You don’t have to roll over your entire balance. You can roll over only the amount needed for your ROBS capitalization and leave the rest in your existing retirement account.
What about outstanding 401(k) loans?
What about outstanding 401(k) loans?
Outstanding loans reduce your available rollover amount. The loan balance is typically either repaid before the rollover or treated as a deemed distribution (which IS taxable). Coordinate with your custodian on the best approach.
How long does the rollover take?
How long does the rollover take?
Varies by custodian. Major brokerages typically process in 3–5 business days. Employer plan administrators often take 5–10 business days. Smaller custodians and TPAs can take 5–15+ business days. Contacting your custodian early helps set expectations.
See the Full Timeline
Understand how long each phase of the ROBS process takes.