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Company terminating plans
Asked Jul 23, 2012, 03:02 PM
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2 Answers my former employer just started the process to terminate all plans due to a buyout of the company. They chose the IRS method. We have been told that due to the employer choosing this method of closure, all employees cannot cashout or rollover their 401k's until the IRS has approved the termination, which can take up to 6 months, and all employees requests have been properly completed and submitted. This doesn't sound right.. shouldn't I be able to get access to my money to cash out or roll over since my company has closed. FYI, the New company does not utilize the same 401k company, therefore we must decided on a choice. |
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| I recommend that you sit tight. While access can be temporarily restricted due to technical legal reason, eventually, the custodian MUST give you access to the funds to either roll them over into the new company's 401K plan OR to roll them over into a rollover IRA. | ||||
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| Unfortunately when a 401(k) plan terminates it may actually take up to a year for the monies to be distributed out of the plan. Here's an IRS web page that describes the process: 401(k) Resource Guide - Plan Participants - Plan Termination | ||||
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