I received a letter from a company I left in July 2004 about paying back money put into a 401k plan.
A paragraph reads: Based on your date of Hire of 1/2/02 and your date of termination
Of July 31, 2004, you were credited with 3 years service. YOur vested percentage was forty percent and your vested balance is $$$$. Our record indicate that you received a plan distribution in the amount of (total money) and resulting in an overpayment of $$$$.
My old boss allowed me 2 years ago to rollover the money to an IRA. Without mentioning a word of overpayment. Now 3 years later he wants me to pay back the excess.
The letter states it is due to IRS regulations.
Should cash out the IRA and pay the excess? I am puzzled and wonder if this is legal since 3 years have past.
Any info would be appreciated.