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Left job - Not allowing 401k rollover until next year!?!?!?

pokerfreak07 228 331 July 13, 2016 at 08:16 PM in Finance (5)
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Good Evening Slickdealers!

My wife recently switched jobs. She was employed at a small crummy college that is under an umbrella company that operates multiple schools. She had a 401k, so I set up a free fidelity IRA account and told her to call her old work and have it rolled over. She was forwarded to the administrator at "corporate" and this was the response:

The 401k plan is a trustee directed plan and as such all of the monies are in one account. At the end of the calendar year a third party values the plan in total and then puts a value on each individual’s amount. Anyone who left employment within the calendar year will be mailed a packet in January that will explain your options and also include the necessary forms that might need to be completed. Checks are then cut in February. Please let me know if you have any further questions.

Is this legal, or is there any way I can force them to let us roll it over? This seems really stupid... if you left on January first they would have your money for over a year! In 5 years working there all she would get is a yearly statement, no possibility for access/visibility, etc.

Thank you in advance for anyone that can offer any insight!

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#2
Check with bogleheads...this site is useless for 99% of financial questions.
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#3
This Q&A seems helpful

Alternatively, you may ask your employer to provide an explanation for refusing to honor your request; in fact, you must be given an explanation in writing. Legitimate explanations for a delay in distributions include the following:
  • You are not yet eligible to receive distributions from the plan. For instance, the plan may require that participants reach a certain age before they are considered eligible to receive a distribution. This age requirement can apply even if you are no longer employed with the company.
  • The plan may make payments only at a certain frequency, such as quarterly. Therefore, if you requested a distribution in mid-January, you may need to wait until March 31 before you receive the requested amount.

If you feel your employer is not complying with the terms of the plan, you may contact the DOL toll free at 1-866-444- 3272 and ask to speak with a regional office representative near you, or you may contact your regional office - see http://www.dol.gov/ebsa/aboutebsa...#section13 for a list of regional offices and their contact information.
Your employer appears to have provided a legitimate explanation in writing so you likely just have to wait.
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Last edited by dhc014 July 14, 2016 at 09:33 AM
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#4
Quote from pokerfreak07 View Post :
Good Evening Slickdealers!

My wife recently switched jobs. She was employed at a small crummy college that is under an umbrella company that operates multiple schools. She had a 401k, so I set up a free fidelity IRA account and told her to call her old work and have it rolled over. She was forwarded to the administrator at "corporate" and this was the response:

The 401k plan is a trustee directed plan and as such all of the monies are in one account. At the end of the calendar year a third party values the plan in total and then puts a value on each individual's amount. Anyone who left employment within the calendar year will be mailed a packet in January that will explain your options and also include the necessary forms that might need to be completed. Checks are then cut in February. Please let me know if you have any further questions.

Is this legal, or is there any way I can force them to let us roll it over? This seems really stupid... if you left on January first they would have your money for over a year! In 5 years working there all she would get is a yearly statement, no possibility for access/visibility, etc.

Thank you in advance for anyone that can offer any insight!
I used to work in HR and though this is not common, it is completely legal. As long as they have prescribed timelines/action dates, you will have to wait.
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#5
talk to fidelity they should have rollover experts
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#6
Thanks everyone, if this was a quarterly thing I wouldn't care... but I think yearly is a bit unreasonable. I will continue to monitor in case of additional responses, they are all appreciated!
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#7
I would probably request a copy of the plan terms, so you know what sort of fees/processes they have for getting your money out. I rolled money out of an old 401k plan and there was a slew of conditions around profit sharing and fees that I wasn't aware of. Better to be in the know ahead of time.
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