Time necessary to roll over a 401k from prior employer?

[RadAudit]

I would appreciate some information. My son left his 401(k) plan at a former employer when he found a new employer. Now he'd like to roll over the old 401k plan to his accounts at Vanguard. He started that process about a month ago. A Vanguard supervisor now says it may be another month before the roll over is completed.

Is this timeframe unrealistic? Is there a way to hurry up the transfer process?

PS: I suggested standing outside the Vanguard corporate office and screaming they won't give me my money (See Mary Poppins); but, that may be a little extreme.

[bombcar]

Vanguard and providers can be slow. Is it a direct transfer or is it going through cash

[RadAudit]

Direct transfer. In fact, the old 401k plan is invested in a Vanguard target date fund.

[mikejuss]

Direct transfer. In fact, the old 401k plan is invested in a Vanguard target date fund.

But who is the administrator of the old 401(k) plan (e.g., Vanguard, Fidelity, etc.)?

[RadAudit]

Don't know. But if it helps, the former employer went out of business.

[mikejuss]

Don't know. But if it helps, the former employer went out of business.

Well, whom did you or your son contact in order to initiate the direct rollover to Vanguard? I don't believe that Vanguard can initiate such a transaction.

[simplesimon]

I have never done a direct rollover custodian-to-custodian transfer. When I've been mailed a check, I then mail it to Vanguard and they've always processed quickly.

My most recent rollover, I got the check and used the mobile check deposit feature through the Vanguard app and it was a very pleasant and smooth process.

I have to think if Vanguard received the funds, it would've been processed right away and that the problem lies with the former employer's 401K administrator.

[mikejuss]

I have never done a direct rollover, I've always been mailed a check that I then mail to Vanguard which they've always processed quickly.

I believe that this is a direct rollover.

[RadAudit]

Don't know. I assume it is a fairly common practice to ask an organization to transfer an old 401k to another organization. He called up Vanguard and provided the appropriate forms. So, I would guess it was Vanguard's representative/department that handles that stuff.

[simplesimon]

I have never done a direct rollover, I've always been mailed a check that I then mail to Vanguard which they've always processed quickly.

I believe that this is a direct rollover.

My wording was sloppy, apologies. I meant a custodian-to-custodian transfer rather than the individual getting the check.

[mikejuss]

Don't know. I assume it is a fairly common practice to ask an organization to transfer an old 401k to another organization. He called up Vanguard and provided the appropriate forms. So, I would guess it was Vanguard's representative/department that handles that stuff.

I believe that you need to contact the previous administrator to start the rollover process.

[MGBMartin]

Don't know. But if it helps, the former employer went out of business.

I was in a similar situation 20 odd years ago. I hope the issue I had doesn’t befall you but here’s what I ended up doing.
Worked for a company from Europe that opened a small office in US to work on a project for a US company.
The Europe company went bust and abandoned the US office with the manager, who was the administrator, returning to Europe.
The 401k company told us we couldn’t withdraw or rollover without the administrator; our funds were essentially frozen.
I, along with a couple of my colleagues, contacted the Department of Labor who were very helpful. The case manager assigned to us said they would try to get the funds unfrozen by working through the administrator if possible and if not they could get the plan considered abandoned but that would take time. The European company was not helping, even their lawyers were no help.
IIRC they did track down the administrator and he did what was needed to unfreeze the funds.

As I said I hope this doesn’t end being the same in your case but rest assured you will be able to sort it out using the Department of Labor help.

Good luck.

[RadAudit]

As I said I hope this doesn’t end being the same in your case

Thanks for the heads up

[bombcar]

There are (at least) three types of transfers I know of.

Custodian to custodian where the stocks/funds are transferred (usually ACATS, 401(k) → IRA but can be 401(k) to 401(k) - which can cause fund misalignment and getting it bumped back because you have an untransferable fund)

Custodian to custodian where you liquidate, custodian sends a check or wire or whatever to the other custodian.

And Custodian to employee to custodian, where you get a check and have to forward the money on, either by depositing the check with the new custodian, or depositing to yourself elsewhere and transferring it. This is the trickiest because there are time limits and things can go wrong, and it end up counting as an early withdrawal.

[retiredjg]

He started that process about a month ago. A Vanguard supervisor now says it may be another month before the roll over is completed.

Two months is unusual so I think something went wrong. Here's my guess. Your son started the process but either he started at the wrong end (the receiving institution) or someone along the line dropped the ball and nothing happened. Either way, I'm guessing that the process is starting over again, resulting in "another month".

I think he should probably be talking to the custodian of the 401k not the receiving end. Chances are they have their own specific paperwork that must be dealt with.

[123]

...But if it helps, the former employer went out of business.

If the employer goes out of business that likely creates at least two problems. There may be no fee or revenue being paid to the custodian to service the account so it may difficult to generate any assistance from them. If the employer is out of business there may be no one to represent the employer in authorizing release of funds from the 401K account. Generally the custodian only acts at the direction of the employer when disbursing funds. The employer's agreement with Vanguard likely requires employer consent for distributions from the plan, this protects the employer, the plan participants, and Vanguard.

I think the most productive approach would be to contact the former employer and identify the process for a 401K rollover. Perhaps there is an attorney or accountant handling the business closure. If nothing else I would suggest writing a snail mail letter to the employer asking for instructions on how to secure the release and rollover of the 401k funds.

It is unlikely to be resolved quickly.

[MGBMartin]

...But if it helps, the former employer went out of business.

If the employer goes out of business that likely creates at least two problems. There may be no fee or revenue being paid to the custodian to service the account so it may difficult to generate any assistance from them. If the employer is out of business there may be no one to represent the employer in authorizing release of funds from the 401K account. Generally the custodian only acts at the direction of the employer when disbursing funds. The employer's agreement with Vanguard likely requires employer consent for distributions from the plan, this protects the employer, the plan participants, and Vanguard.

I think the most productive approach would be to contact the former employer and identify the process for a 401K rollover. Perhaps there is an attorney or accountant handling the business closure. If nothing else I would suggest writing a snail mail letter to the employer asking for instructions on how to secure the release and rollover of the 401k funds.

It is unlikely to be resolved quickly.

This is exactly the situation I ended up in described in my post above.
It took many months to resolve but my situation was hampered with the administrator being overseas and couldn’t be found for some time.

[123]

This is exactly the situation I ended up in described in my post above.
It took many months to resolve but my situation was hampered with the administrator being overseas and couldn’t be found for some time.

If the OP is not able to resolve the recovery of the 401K account through contact with the employer (or whoever is handling the wrap-up of the business) it looks like DOL would be the next step:

https://www.dol.gov/sites/dolgov/files/ ... n-faqs.pdf

[WoodSpinner]

Does your son have a copy of the 401k Summary Plan Document?

The way these transfers are supposed to work is you START at the old 401k Administrator and request the transfer TO Vanguard.

Understanding the old 401k Administrator is key!

WoodSpinner

[retiredjg]

If the employer goes out of business that likely creates at least two problems. There may be no fee or revenue being paid to the custodian to service the account so it may difficult to generate any assistance from them. If the employer is out of business there may be no one to represent the employer in authorizing release of funds from the 401K account. Generally the custodian only acts at the direction of the employer when disbursing funds. The employer's agreement with Vanguard likely requires employer consent for distributions from the plan, this protects the employer, the plan participants, and Vanguard.

This seems more likely to be the problem than what I guessed above.

[RadAudit]

Thanks to all for the help