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401K rules
Our private company was recently purchased by a DOW public company in the state of New York. We were told that we must roll our 401K into their 401K (their literature calls it an "Employee Savings Plan"). I would prefer to roll my 401K into an IRA. Can I do this? Am I obligated to roll into the new company's plan? We have not been getting answers from the new company.
Some background: We were a company of 500 employees and had a revenue of $300 million. The new company revenue is $34 billion. |
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This depends on how they are handling the merger. In some cases, you would be required to roll it over into their plan. However, if they are terminating the plan, you might have the option. Frankly, I'm not sure why you wouldn't want to roll it over since a large company generally has a lot of investment options.
But the only ones who can answer are the plan administrators. They can tell you if the rollover is required or not. |
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Here is the deal on that. It's not like you are leaving the company and so therefore getting the option to take it out etc. That would be a huge expense for them to pay everyone out. So basically you are resigning the paper work to match the name of your new company with no liability to you. Keep in mind that any withdrawal will be subject to the 20% liability even if you are putting it into a new plan. The money can be transferred directly to the IRA to avoid penalties and continue the tax-deferred status. This means your hands never touch the money. Instead, it is transferred directly into the IRA by your current employer. Check with the best on this one: Retirement Plans FAQs regarding Designated Roth Accounts
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 Originally Posted by MsMewiththat
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