I could use some help. Three years after I left a former employer and rolled over the 401K, they came back last week and said they made a mistake in there vesting and gave me credit for 100% and now I am being asked to send fidelity a check for over 7.5K? Do I have any recourse on this? I was never aware of this mistake till I got the letter.

I could use some help. Three years after I left a former employer and rolled over the 401K, they came back last week and said they made a mistake in ther vesting and gave me credit for 100% and now I am being asked to send fidelity a check for over 7.5K? Do I have any recourse on this? I was never aware of this mistake till I got the letter.


Can any assist on this, please? I just got a second notice to return funds

I would suggest the following:

1. First - do you agree that the 401(k) administrator sent too much money? If not, or if you're not sure why they think the distribution was in error, call the admin of the old plan (the person who sent you the letter) and request verification. The rules for vesting ought to be clearly spelled out in the plan documents, which you should request a copy of. Different 401(k) plans have different rules on vesting periods for the company match, so you need to see the plan documents to know for sure. The contributions that came out of your own pay check vest automatically at day 1.

2. Assuming that the distribution was indeed an error, I suggest calling the admin of the plan you rolled the money into (an IRA, I assume) and ask them what the process is to return money to the old plan. Whatever you do, you do not want them to write a check to you, and then have you to repay the old plan yourself, because then they (the IRA) will tell the IRS that they sent you a distribution, and that will raise all sorts of tax complexity. Any money that gets sent back to the 401(k) needs to go direct from the IRA back to the 401(k).