I'm having trouble getting my former employer to distribute my 401(k) plan balance to a rollover. Can you tell me the reasons why an employer might delay distributions and if there is a government agency I could contact to encourage the distribution?

By Denise Appleby AAA
A:

Your employer or the plan administrator for the 401(k) plan should have provided you with a copy of the 401(k) plan's summary plan description (SPD). If you can't find your copy, contact your employer and ask for a replacement copy. A copy of the plan's SPD may also be obtained from the Department of Labor (DOL) by writing to: The Department of Labor, EBSA, Public Disclosure Room, Room N-1513, <?xml:namespace prefix = st1 /?>

200 Constitution Avenue, N.W., Washington, D.C.20210

. (They may charge you copying fees, which are usually a very small amount.)

The SPD is required to include an explanation - in non-technical terms - of the plan provisions, such as your benefits and rights under the plan, including when you are eligible to receive distributions.

Alternatively, you may ask your employer to provide an explanation for refusing to honor your request; in fact, you must be given an explanation in writing. Legitimate explanations for a delay in distributions include the following:

  • You are not yet eligible to receive distributions from the plan. For instance, the plan may require that participants reach a certain age before they are considered eligible to receive a distribution. This age requirement can apply even if you are no longer employed with the company.
  • The plan may make payments only at a certain frequency, such as quarterly. Therefore, if you requested a distribution in mid-January, you may need to wait until March 31 before you receive the requested amount.

If you feel your employer is not complying with the terms of the plan, you may contact the DOL toll free at 1-866-444- 3272 and ask to speak with a regional office representative near you, or you may contact your regional office - see http://www.dol.gov/ebsa/aboutebsa/org_chart.html#section13 for a list of regional offices and their contact information.

This question was answered by Denise Appleby
(Contact Denise)

RELATED FAQS

  1. What is the difference between a fixed and variable annuity?

    Understand the difference between fixed, variable and indexed annuities, and read a brief summary of their respective risks ...
  2. What are the best ways to lower my taxable income?

    Paying taxes is an unavoidable obligation each year, but individuals and business owners can take advantage of various strategies ...
  3. How does the Canada Pension Plan (CPP) work, and what asset mix does it hold?

    Learn the difference between a chartered financial analyst and the Canadian pension plan. Explore Canadian retirement options ...
  4. What are some examples of common fringe benefits?

    Learn how offering fringe benefits can be a strategic recruitment and retention tool for employers and drastically increase ...
RELATED TERMS
  1. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  2. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
  3. Leveraged Benefits

    The use – by a business owner or professional practitioner – ...
  4. Peri-Retirement

    A term for the period of time leading up to actual retirement. ...
  5. MyRA

    A new tax-advantaged retirement account that President Barack ...
  6. Target-Date Fund

    A mutual fund in the hybrid category that automatically resets ...

You May Also Like

Related Articles
  1. Professionals

    Just Retired? No Better Time for a Second ...

  2. Professionals

    When Your Client's Retirement is Around ...

  3. Professionals

    A New Wake-up Call for Savers

  4. Professionals

    Retirement Bliss? Not So fast: When ...

  5. Professionals

    Multiple Accounts? Here's How to Calculate ...

Trading Center