Recently I paid off my 401k loan with a certified check to apply for another loan at the end of my 5 day waiting period I called fidelity they told me as of 4/27/15 at 8.30am the waiting period has been changed to 30 days. Then Fidelity contacted someone at Ryder to make an exception. Someone wanted proof that the payoff funds cleared my bank before my loan could be approved. I have two questions it was a certified check how can it no clear 2 how can you change your policy without informing your employees? Our HR Dept didn't know

Sure they can... and certified checks, cashiers checks and money orders are forged and stolen all the time... they have good reason to wait until it clears and is certain it doesn't bounce. One of the reasons I won't accept them for payment for anything.

it was a certified check how can it not clear.

It will clear but according to the banks policy which may be anywhere from 3 to 10 days. You will have to ask them (Fidelity) what their policy and procedure is for crediting your account.

2 how can you change your policy without informing your employees? Our HR Dept didn't know

Your company has nothing to do with the policy, and practice of your 401k Plan Administrator (Fidelity), and YOU should have been notified directly from them (Fidelity) of any changes in their rules.

I have to disagree partially with tal here. The company sponsoring the 401(k) sets the rules. The administrator may suggest some rules, they may even tell the company that if they don't set certain rules they can't administer the plan. They may also have clauses that permit the administrator to make certain changes without consulting the company. So the first thing I would do is check the plan document. If the plan document has it in writing that there is a 5 day waiting period, then stand your ground. Check the document to see what rules there are for making changes. Ask the administrator for proof they have followed the rules of the company for making changes.

But the issue of the check clearing is one they can probably make that call.

Tal... A fake Certified check may take up to a month before it is returned, My wife has seen several in the bank she works in. And several times it has taken almost a month before it worked its way through the system. Though in Theory it should happen a lot faster.

Actually it's the IRS who sets the rules and guidelines for retirement accounts.

401(k) Resource Guide - Plan Sponsors - Plan Qualification Requirements (http://www.irs.gov/Retirement-Plans/Plan-Sponsor/401(k)-Resource-Guide-Plan-Sponsors-Plan-Qualification-Requirements)

But Scott is correct that you can clear this up,

Retirement Plans FAQs regarding Loans (http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Loans#6)


If your 401(k) (http://www.irs.gov/Retirement-Plans/401(k)-Plan-Fix-It-Guide-Participant-loans-do-not-conform-to-the-requirements-of-the-plan-document-and-IRC-section-72(p).) plan or 403(b) (http://www.irs.gov/Retirement-Plans/403b-Plan-Fix-It-Guide-You-havent-limited-loan-amounts-and-enforced-repayments-as-required-under-IRC-Section-72(p)) plan has made loans that haven't complied with plan terms about loans, find out how you can correct this mistake.

They may have not notified you properly of changes to the plan usually well in advance.

Yes, the IRS issues GUIDELINES on the rules for 401(k)s. But companies do have some leeway into what features they put into a plan and how those features are structured. For example, there is no requirement that plans even allow loans, but if they do, then there are some rules that need to be followed. Again, that is done by the plan sponsor. It may be done in conjunction with the plan administrator or the sponsor may just buy a canned product from an administrator and give them free reign. But whatever the rules are they NEED to be in writing.