myfootleft
Junior Member
Although my question is about 401K, which is under federal law, I live in California.
I was laid off from a job and chose to rollover my 401K into and IRA. Therefore, I had to administer of 401K plan write a check directly to my investment company. This was done in April of 2005. I just received a letter today, November 16, 2005 which states "Due to an erroneous vesting status of 100% applied to the company contribution portion of the account, the rollover distribution was overstated by the unvested amount. As of the distibution date, the participant's vested percentage should have been 40% and, as a result, the distrubution was overstated by" x dollars. So, they want me to send this overpayment back to them by December 2, 2005.
1. Am I obligated to return this overpayment? (I am inclined to believe I am and that this amount is not eligible for rollover.)
2. Since I rolled over the $ to an IRA, if I must return the overpayment, I should have my investment company withdraw the money and send the check. Is that correct?
3. If any fee or penalty is incurred to do this, would my old company be liable to pay it?
4. The letter says that the overpayment needs to be sent back by December 2, 2005 which is two weeks from the date on the letter. If the overpayment does, indeed, need to be returned, what if they receive the monies later that the 2nd?
Thank you very much for any information you are able to provide. It will be truly appreciated.
I was laid off from a job and chose to rollover my 401K into and IRA. Therefore, I had to administer of 401K plan write a check directly to my investment company. This was done in April of 2005. I just received a letter today, November 16, 2005 which states "Due to an erroneous vesting status of 100% applied to the company contribution portion of the account, the rollover distribution was overstated by the unvested amount. As of the distibution date, the participant's vested percentage should have been 40% and, as a result, the distrubution was overstated by" x dollars. So, they want me to send this overpayment back to them by December 2, 2005.
1. Am I obligated to return this overpayment? (I am inclined to believe I am and that this amount is not eligible for rollover.)
2. Since I rolled over the $ to an IRA, if I must return the overpayment, I should have my investment company withdraw the money and send the check. Is that correct?
3. If any fee or penalty is incurred to do this, would my old company be liable to pay it?
4. The letter says that the overpayment needs to be sent back by December 2, 2005 which is two weeks from the date on the letter. If the overpayment does, indeed, need to be returned, what if they receive the monies later that the 2nd?
Thank you very much for any information you are able to provide. It will be truly appreciated.