401K Questions

[LadyT1612]

What is the name of your state (only U.S. law)? Kentucky

I am asking this on behalf of my mother. She works for a doctors office whose company last year merged with one the big hospitals in the Northern Kentucky area. Since they would now fall under the Hospital and their retirement plan, the prior company gave them the option of either rolling over their current retirement fund to the Hospital's or withdraw it so they can move it to a fund of their choosing. My mom and many others she works with opted to withdraw thier money (she wants to move it to her credit union). They filled out the necessary paperwork and turned it in to their prior employer. This was a year ago and they still haven't received their money. My mom says the prior employer will not sign the papers for the bank, their retirement fund is with, to release their money to them. They first said it would be available at the beginning of this year, then they told them that it would be this summer, now they are telling them that it will be December before they get their money. I'm just scared that my mom is going to end up with no retirement fund because the company keeps giving them the runaround. She recently received a statement of her account and she says the amount that was in their has decreased since the beginning of all this. My mom had been calling to ask questions, but they wouldn't answer the phone and they even told her to stop calling. Can they hold on to their money for this long? Is there anything they can do to get this company to give them their money?

Thanks for any help you can give.

 

[cbg]

They can each run, not walk, to their telephones and contact the US DOL, which is the regulatory agency for 401k's. While the length of time a plan has to release monies is to a certain extent plan specific, a year is running much too long in my opinion.

 

[FlyingRon]

My mom and many others she works with opted to withdraw thier money (she wants to move it to her credit union). They filled out the necessary paperwork and turned it in to their prior employer.

Hopefully, what she really asked to do is to roll it into a qualified plan (such as an IRA, etc...) at the credit union. If she withdraws it she is going to get hit with taxes and a 10% penalty even if she intends to put it back into another retirement account.

Yes, a year is too long. When a company is acquired the resulting company has only a year to COMPLETE the transition of the retirement plans (which means rolling things over into the new plan or as to the employee request).

She should pursue this with the CURRENT management. It is their responsibility.

This is where she should go next http://www.dol.gov/ebsa/

 

[LadyT1612]

Yes that is what she had wanted to do, but they will not sign the papers so the bank they go through will release her funds.

Thanks for everyone's responses.