401K Rollover

[tevyesports]

Company is located in Alabama. I use to work for a company located in Alabama and left the company last June '07. I was an rep. for them and I live in California. Due to personal/family reasons, I did not rollover my 401K. 4 weeks ago I sent in my request to rollover my 401K to the company. To date I have not received a response to my 3 mailings. Since the 401K money was taken from my pay check, I know the money is mine.

What are the laws regarding timely rollover? I think it is 30 days. Any suggestions on how to push them to actually fo their job?

Thank you.

[ErynSMA]

I am assuming you are talking about rolling your current 401k to the one with your new employer.

Not sure about the legalities, but have you tried actually calling the company? You may spend a while on the phone, but at least that way you'll get some sort of response. Make sure you note when you called and who you spoke to. First call the company you are rolling the money into. Make sure they sent out a letter of acceptance or similar paperwork. Then call the company the funds are coming from, ask them if they received the letter, and ask for status. Find out what the holdup is with funds if funds have not been sent, and verify that funds have been sent to the right place.

If you situation is different from what I assume, please let me know.

[efflandt]

A direct trustee to trustee transfer is best to avoid withholding. You should be able to arrange that through the destination trustee (broker). Hopefully you have some statement showing the 401(k) trustee and account number.

If a check is made out to your name, they are required to withhold 20% towards taxes. And if you do not add the 20% back in from other means when rolling it over, that 20% would be taxed plus 10% penalty (if under age 59.5). You can avoid the withholding by either doing a direct transfer or by having the check made out to the new trustee's name.

When I transferred an IRA from insurance company to broker (initiated from broker's end) it took over a month to transfer it. But in the meantime, the insurance company sent me a form to verify the transfer.

401(k) plan rules can vary. Our plan says if you are no longer employed there and your balance is less than $5000, they just send you a check. When our company changed 401(k) trustees, I think the amount transferred over was held for a year earning interest before we could make investment choices with it (I guess to make sure all accounting was correct).

Call the HR (human resources) dept of your former employer if you do not have your plan documents.

[tevyesports]

Thank you.

[Nevergrowup]

401ks are all different...they have plan documents that specify their rules. I agree with the other poster that told you to call them.

The receiving broker dealer cannot initiate a rollover of a 401K. 401Ks each have their own paperwork that can be completely different from company to company. It isn't the same as transferring from one broker dealer to another. And insurance investment transfers are even more different. To add another element, some 401ks have a third party administrator that handles things. For example, we handle 401k investments, but each have one large account for the company. Our third party admin has the paperwork and distribution amounts.

The 401K must supply you paperwork (or at least the phone or online capability of directing where your money goes). A specific time frame isn't a given, because some plans won't let ex employees roll over until a certain time period has passed. On the forms, there will be a place to take a distribution (and it should state the tax ramifications, there is also probably a place to sign saying you have received the separate tax notification which they should provide to you), a place to transfer to another plan, or a place to directly rollover to an IRA. Submitting an ACAT (accounts transfer form) or any other document from your receiving firm won't help with a 401k.

Now, if they keep dragging their feet, and YOU KNOW that the plan time period is up and you are eligible to roll over, you could send them a letter stating that it is their fiduciary duty to represent the plan as intended, and that they are violating their own plan rules by not forwarding the documents you are requested.

I deal with rolling over client 401ks daily (I work for a financial firm) and they each have their own rules and "games", sometimes.

[Dandy Don]

Mention the name of the company (what it was when you worked for them) and their city/state so I can check some records to see what the new company name is, if they were purchased or bought out by someone else.

DANDY DON IN OKLAHOMA (tiekh@yahoo.com)

[derekp]

You may have a balance forward plan which only values an individual's assets each quarter. Upon valuation you will get a statement which shows your vested and unvested balance. Your HR person should have rollover paperwork and your rollover should be smooth. Be advised that it may take 30-60 days from the end of the quarter to get the valuation (and hence the rollover) complete...Keep after your HR department. Your recourse if you do not get the rollover is to contact the Department of Labor help desk..

Derek

[cbg]

Also, depending on the plan disbursement may not be immediate. I've seen plans that only allowed for disbursement once annually; if the distributions were made in January and you quit in February, it would be the following January before the funds could be released.

Such plans are rare but they exist.