Changing 401K provider due to company acquisition

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grigri9
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Joined: Mon Dec 03, 2018 4:47 pm

Changing 401K provider due to company acquisition

Post by grigri9 »

I currently have $800K invested in my 401K with Fidelity exclusively in FSKAX.

My company was acquired and the acquiring company is switching us over to Morgan Stanley as the 401K provider on 12/31.

Is there any way I can leave my existing investments at Fidelity? I am likely not going to be at this company in 6 months and would like to keep my funds at Fidelity as I do a lot of my banking there and I am assuming that Morgan will have a worse fund selection.
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goodenyou
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Re: Changing 401K provider due to company acquisition

Post by goodenyou »

You can roll your Fidelity 401k to a Fidelity IRA when you leave the company.
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ClevrChico
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Re: Changing 401K provider due to company acquisition

Post by ClevrChico »

I had a similar situation with the original provider being Vanguard. It turned out excellent and the new provider has index funds at institutional expense ratios. So, it may not be worth doing anything.

Does your Fidelity plan allow in in-service 401k rollover to an IRA?
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goodenyou
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Re: Changing 401K provider due to company acquisition

Post by goodenyou »

Just be aware that, if you have intentions to do a Backdoor Roth, you won't want to have any IRAs. You may not be compelled to roll your 401k to another plan when you leave the company, but it will be encouraged. Companies don't like having old employees on their 401k plans. My wife has a 401k balance at Fidelity from an employer she left in 1997. She has another Fidelity 401k plan from recent employer as well.
Last edited by goodenyou on Wed Oct 30, 2024 3:17 pm, edited 1 time in total.
"Ignorance more frequently begets confidence than does knowledge" | “At 50, everyone has the face he deserves”
MedEngineer
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Re: Changing 401K provider due to company acquisition

Post by MedEngineer »

I'm in a similar situation, changing 401k at years end. I hope I could roll out of the assets of the Lincoln plan I'm in now, but I'm not holding my breath that they will let me do that. My past experience has been that you have to be off-payroll to roll out of a 401k.
Jeepergeo
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Re: Changing 401K provider due to company acquisition

Post by Jeepergeo »

MedEngineer wrote: Wed Oct 30, 2024 3:17 pm I'm in a similar situation, changing 401k at years end. I hope I could roll out of the assets of the Lincoln plan I'm in now, but I'm not holding my breath that they will let me do that. My past experience has been that you have to be off-payroll to roll out of a 401k.
Check your plan's description. IIRC, my company's plan allowed those still employed AND over 59.5 years old to roll out. And after the roll out, the company would still make contributions on the employee's behalf and the employee could still contribute.
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