401k & Resignation

[BadDecision]

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

Are there any rules affecting employers regarding distribution after leaving the job?

R.L.E.:
Employee resigns position after 9years at company. Employee is over 60yo and has a reasonable chunk in 401k.

Employee has been gone from job for almost 4 months.

Employer will not return calls about 401k, and now plan administrator says employee has to talk to company owner because the owner has not decided what he is going to do with the employees 401k.

Is this reasonable?

I know it could take up to a year to receive your distribution, however can an employer hold up distribution and make the decisions regarding employees 401k?

I am curious, I suspect the employer does not have the money and has maybe used the 401k account to stay afloat.

Is that legal?

I appreciate any input, this question is for my mom.

 

[cbg]

If true, then no, it is not even remotely legal.

The plan document, not the employer, determines when distribution takes place. It could be immediately, quarterly, semi-annually or annually, but the employer must follow what the plan document says.

Does the plan have a third party administrator?

 

[BadDecision]

Yes it does, and the administrator is stating she is waiting on the employer to decide what he wants to do. I believe it is Merril Lynch.

It just doesn't sound right to me. But, I don't understand the legalities in these types of things. I am not sure if she has a leg to stand on.

I know in my own experience I received a packet within 30 days of resignation to let ME determine what option I wanted to go with.

Thank you!

 

[cbg]

The administrator should know what the plan document says.

Something sounds very, very wrong here and if you don't get an answer within a VERY few days, I would recommend contacting the US DOL (the regulatory agency for 401k's).