L
lkfoss
Guest
I reside in Texas.
After my employment was terminated, I requested a distribution of my 401K account. The balance is over $5,000. I was told by my former employer that distribution would be done in a "reasonable time."
My question is, is there a deadline in which distribution must begin??? A reasonable time is open for interpretation. I might think 60 days is reasonable. The employer might think 180 days is reasonable.
In our Summary Plan Description, Article X - Distributions and Benefits Under Your Plan, states under section Benefits Upon Termination, “You will receive benefits as soon as practical after that date.” However, in the next section, Article XI - Benefit Payment Options following is stated:
The Plan Administrator may delay payment to you for a reasonable time for administrative convenience. However, unless you choose to defer receipt of your distribution, the Plan must begin your payments within 60 days after the close of the Plan Year following the latest of:
(a) the date on which you reached your Normal Retirement Age;
(b) the 10th Anniversary of the year which you became a Participant in the Plan; or
(c) the date you terminated employment with the Employer.
I am aware that the above paragraph is drawn from the Employer Retirement Income Security Act of 1974 (ERISA), a federal regulation.
Then (c) would apply to myself. Correct? If this is true, then distrubution should begin 60 days from the end of our plan year, Dec 31, 2001. So the lump-sum distribution request should be sent out no later than May 1,2002
Thanks for any help!!!
After my employment was terminated, I requested a distribution of my 401K account. The balance is over $5,000. I was told by my former employer that distribution would be done in a "reasonable time."
My question is, is there a deadline in which distribution must begin??? A reasonable time is open for interpretation. I might think 60 days is reasonable. The employer might think 180 days is reasonable.
In our Summary Plan Description, Article X - Distributions and Benefits Under Your Plan, states under section Benefits Upon Termination, “You will receive benefits as soon as practical after that date.” However, in the next section, Article XI - Benefit Payment Options following is stated:
The Plan Administrator may delay payment to you for a reasonable time for administrative convenience. However, unless you choose to defer receipt of your distribution, the Plan must begin your payments within 60 days after the close of the Plan Year following the latest of:
(a) the date on which you reached your Normal Retirement Age;
(b) the 10th Anniversary of the year which you became a Participant in the Plan; or
(c) the date you terminated employment with the Employer.
I am aware that the above paragraph is drawn from the Employer Retirement Income Security Act of 1974 (ERISA), a federal regulation.
Then (c) would apply to myself. Correct? If this is true, then distrubution should begin 60 days from the end of our plan year, Dec 31, 2001. So the lump-sum distribution request should be sent out no later than May 1,2002
Thanks for any help!!!