Fidelity Made A Major Error In 403b Distribution And Is Offering No Help To Correct It.
Hello from Location: Oregon, USA. I requested a $25k withdrawal from my 403b (QDRO due to divorce) with Fidelity at the end of December. Instead they withdrew 100% of the account which was $367k. Of that $101k was withheld for taxes with $266k being deposited in my Fidelity brokerage account. I called them the next day after the withdrawal to alert them to the error. They submitted a work order for a "tape pull" of the recorded conversation in which I made the withdrawal request and they have confirmed that I had requested a $25k withdrawal and that they had made an error. I have made several calls since then requesting that they correct this error they have made. I was told on Feb. 2nd that a letter was being sent offering a solution to the issue. I have finally received the letter today (Feb 28th) and it simply says that I can send the money back to them within 60 days of the withdrawal and then tell the IRS what happened to receive a tax credit in 2026.
Some issues with their "solution":
-I will have expenses from the hiring of a tax professional to help me to correct the tax issue since I doubt the TurboTax software I have always used will be able to help me with this problem.
-It has placed me in financial hardship since the error was made because I have not wanted to touch the money for fear of it somehow invalidating the solution to the problem.
-I have received their "solution letter" more than 60 days past the withdrawal date so their solution is not even valid if I am reading the letter correctly.
-This massive amount of "income" for 2025 will affect my college aged daughter's FAFSA score and will seriously mess with her ability to receive financial aide which she should rightly qualify for.
-This massive amount of "income" may also negatively affect my own qualification for whatever welfare services that I might otherwise qualify for.
-The mutual fund that should have still had a balance of $342k after the requested $25k withdrawal has increased in value 1.9% since the error resulting in a loss of ~$6.5k of increased value for me.
My question: Do I have a case against Fidelity and if yes which particular discipline of attorney (which area of law) should I be seeking to assist me in this case? Thank you.
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