401K fund distribution

[jmstone]

What is the name of your state?PA

The company I worked for was bought out by another firm. Basicly everyone was rehired by the new firm. The question I have concerns the 401K account under the old firm. I was told that the old firm filed a form to the IRS for terminating the plan. The start date for the new firm was June 1 2004, I started asking when the funds in our old account would be distributed in October of 2004 and was told that they were still waiting for the determination letter from the IRS. Called the IRS today April 1, 2005 and found out that they didn't receive the termination form until Feb. 3, 2005 and that it can take another 6 to 12 months for a determination letter to be issued. Is there another way I can get these funds? The money came out of my paycheck and I haven't had access to it for 10 months now and it may be another year before I can. Thank you for any help.

 

[cbg]

Most likely not.

The fact of the matter is that it takes a very long time, and yes, I am talking a year or more for a 401k termination to be processed by the IRS.

If the sale had never happened, you would not have had access to these funds in the first place. The IRS very strictly regulates when you can and cannot withdraw funds form a 401k plan. You don't automatically get to access 401k monies any time you want.

 

[jmstone]

Thank you for responding. It's not so much that I want the money in my hands, it's just that I can't roll it over into a new plan or control how the money is being invested in different funds and/or growth plans.

 

[withonel]

Have you tried to contact the 401K plan?

I went through a similar situation a few years ago, while employees could no longer contribute to the old plan they could direct the funds that were in it. Many employees were concerned because this was when the stock market was taking a dive, many moved their funds to more stable lower interest investments while waiting for the opportunity to roll the old funds into the new plan. It did take a long time, I think it was 3 years from the acquisition before the IRS completed the transfer. You may not be able to take the money out of the 401K but you might be able to move it around within the account.