Denied 401k rollover

[arfonce]

What is the name of your state? Ohio

I was 1 of 10 persons laid-off on Sept 7th. The following week I tried to initiate a rollover of my 401k to an Ira but I was told that I couldn't because there was a chance that I could be called back because I hadn't been laid-off for a year yet. After making a few calls I found-out that I had been put on what's called a layoff status and until I'm on a terminated status I couldn't roll the funds over. I was also told that you could reach the terminated status by either being laid-off 1 year or telling the company that there was no chance of my going back to work for them. Just a month before the layoff we were told by a representive from the company that manages our 401k that we could do a rollover as soon as we were laid-off. He probably didn't know of the company's policy regarding layoff statuses. I did this before when I left another company with no problems. How is this possible? FYI, we were all called back to work 5 days later.

 

[pattytx]

If the company policy or practice is in conflict with the plan document, the plan document controls. Do you have a copy of the SPD (Summary Plan Document)? You are entitled to one, and this should be addressed in it. Ask your benefits or HR representative.

 

[Beth3]

You can't take a distribution from your 401(k) Plan until your employment is terminated. If by layoff status your employer means you are basically on unpaid leave subject to recall, that is not the same as being terminated. You are free to send your employer a written resignation which should resolve the situation and allow you to roll over the funds. Be aware that if you do that though, you almost certainly will be removed from the recall list and if work should again become available, you will have to apply just as any other candidate and if rehired, you will be a "new" employee.

 

[arfonce]

Like I said in my original post,we were all called back 5 days later so i'm not concerned about rolling the funds over right now. I was just asking how this was possible.

Arfonce

 

[Beth3]

As long as you are an employee of an organization, it is unlawful for your employer to allow any employee to "roll over" their 401(k) funds or take any sort of distribution except for several extremely limited reasons that constitute a "Hardship Withdrawal" under the pertinent regulations.

 

[arfonce]

In my original post I asked how a rollover could not be allowed, and I got the answers I thought I would get. I never said I wanted to try the rollover once I went back to work. I'm sure that there will be another lay-off in the not too distant future. I just wanted to know where I stand-legally.

 

[Beth3]

I just wanted to know where I stand-legally.

Which is exactly what I've explained to you. Ai yi yi.

 

[arfonce]

Beth,

You also read more into the situation than was presented. Please stick to the original questions from now on.