Oilburner wrote:Yesterday was my last day with my employer of 10 years. I contributed the maximum to the company 401k. I was paid on the 1st and 15th of every month. About three days after the 15th, the employer added my 401k contribution and the (small) employer match to my 401k for the most recent pay period. I was paid on March 15th and received a full pay for the 1st through the 15th (all of it went to pay taxes and was funneled to my 401k because during that pay period I accepted a job offer with another company, but have a 6 month waiting period to participate in their company 401k, so I upped my 401k contribution to 95% of my salary to get as close to the maximum contribution allowed for the year).
At the end of the month I should receive pay for the five days I worked during the 03/16 to 03/31 pay period (the 18th through the 22nd).
Question: Will this last pay go to fund my 401k with the now ex employer? I thought it would, but when I look at my 401k account online, for "future" contributions I read, "This view shows how your money will be invested the next time you or your employer makes a contribution, Pretax: 0%, Catch-up: 0%, Employer Match: 0% (the previous day my pretax and catch-up contributions were set to 75% and 20% of salary, respectively and I did not change them).
It looks like you didn't get to make a contribution. Your final check should reflect the fact that nothing was withheld for a 401k contribution.
What the above is telling me is because I am no longer employed, the employer is disallowing further contributions to my plan, even though it is from money earned while I was employed and a plan participant. Is this the case? Is it legal?
Yes, it's legal.
Also, there is a prominent note after I log-on to my 401k account that reads, "You are no longer employed by [Company Name]. You may leave your money in this plan or withdraw your money by rolling it into an IRA [hyper-linked "IRA" to the payroll processor's investment site], rolling it into another employer's plan, or distributing it, payable to you [hyperlink to 'Rollovers & Withdrawals"].
These are standard options.
I never requested a rollover or withdrawal from this plan, but it looks like one was requested and is in process. (I wanted to wait until about the 5th of next month to allow a deposit (if any) to be made to my 401k for the work I performed during my last week on the job (which was in the current pay period) and then roll it over to Vanguard). But under "Rollover Status & History" the following is listed under "Rollover or Withdrawal", "Distribution package scheduled to be sent on 03/25/2013" and under "Status" it says, "Mailed". The next item on the tracking list is "Payment sent Confirmation #", but those are blank.
I would call the company first thing Monday and see what and why something was done.
Is there reason to be concerned about this? Or is it standard practice for 401k distribution packages to automatically be sent when employees resign? I thought I had to initiate the process. If this helps any, my former manager stated during my next to last day on the job that the investment broker for the plan was going to contact me to assist me, "Since I know you want to get your money out as soon as you can" (he knows I was not happy with the company 401k (high) plan fees). I figured the broker would contact me, but to attempt to get me to leave the money in the plan or move it to investments he brokers. The broker never contacted me.
Yes, there is some concern, and the money should not have been sent without some sort of submitted written request by you. So, the first thing to do is find out if some action was actually taken and what it was, such as a full withdrawal. Ask why it was done without you requesting it.
Is there any reason to be concerned about the above? Should I simply contact Vanguard to initiate a pull for the rollover?
There are some concerns, but first find out if something was actually done. Then post again in this thread and we can provide some guidance on how to handle it.
Oilburner wrote:I am paying a 1.68 % ER for a Vanguard Target Date Retirement Fund in this plan.
Oilburner wrote:I have about $300,000 in the Plan. It's about half the company Plan balance. I would think they would try do everything they could to convince me to keep it in there. I'd be surprised if they did not. I am paying a 1.68 % ER for a Vanguard Target Date Retirement Fund in this plan. The entire balance is in this fund. Exact same fund as the 0.18 ER Vanguard Target Date Retirement fund. Of the 1.68% ER, 1.5% of fund assets is deducted from my account each year in the form of an insurance company "wrap" fee. The funds in the the company 401k Plan are "separate sub-accounts" maintained by the insurance company. This information is appears in the insurance company's fund facts sheets The sheets also state the sub-accounts invest exclusively in other fund companies' funds. In my case, a Vanguard Retirement Date Fund. The only difference in the insurance company branded fund is the addition of the wrap fee.
I looked again closely at my account on my soon-to-be ex 401k plan provider's web site and I saw this note: "Rollover and Withdrawal Status and History: 1 rollover or withdrawal has been initiated from your account since 03/25/2013." If this is true, I did not initiate it. I'll call them first thing Monday morning to see what is going on. I suppose if the account was closed/distribution made to me, it would not be too bad and I could open a rollover IRA at Vanguard before week's end. I would much prefer a direct rollover, and the check not made out to me, though.
Do company 401k plans charge a fee to process a rollover request? Are these fees limited by law?
dickenjb wrote:It would be bad because they would cut you a check for 20% less than your $300K balance and you would have to come up with another $60K within 60 days to complete the rollover or pay tax and 10% penalty on the $60K. Then wait until April of 2014 to get the $60K back in the form of an IRS refund.
mah001 wrote:If you are at least age 55 by 12/31/13, there's no 10% penalty on distributions from the 401(k).
You said they said 'one rollover since 3/25/13.' I assume that's a typo.
Oilburner wrote:I too am perplexed. I know, 03/12/13 has not occurred yet. That's Monday, the first day at my new job.
Yes, I meant March 25th (I corrected the previous post), I'm tired and I've been looking at this too long. I do appreciate everyone's help, though. This has been a learning experience. This is a great forum.retiredjg wrote:Oilburner wrote:I too am perplexed. I know, 03/12/13 has not occurred yet. That's Monday, the first day at my new job.
Speaking of typos...made me laugh!
I think you may have exhausted your brain doing research on this. It is probably nothing. Try to enjoy the rest of your weekend.
retiredjg wrote:P.S. Are you sure you want to do the rollover to IRA? Have you checked to see how good the next 401k plan is?
retiredjg wrote:mah001 wrote:If you are at least age 55 by 12/31/13, there's no 10% penalty on distributions from the 401(k).
Isn't this only true if the employee retires?
Oilburner wrote:I was not aware I could do that. Nice. The first step is still getting the money over to Vanguard.
Default User BR wrote:No, the only stipulation is....
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