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Author: jayhawk8666 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 25265  
Subject: 401K novice Date: 3/4/2004 12:13 PM
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My company has a 401K plan about which no one seems to be able to provide informaton. Our "accountant" (boss' wife)sent us to an employee benefits place that purported to explain. They said we can self-direct. The people we saw though did not have our money. Bosses had put it with their financial planner in money market and told us to do what we wanted with it.

Now I'm trying to move to new planner and he's asking me questions about plan,i.e. What are the plan's/my investment options. He says I should have gotten a list of some sort. I've had him call the employee benefits place. They say talk to our "accountant." "Accountant" has called me with concerns that my new guy, who's asking her questions she can't answer, is incompetent.

I don't know enough to know if one, both or neither are incompetent. He's mentioned rolling the 401K into an IRA. Does that make sense? Also same company had profit sharing (in which I am partially vested) before the 401K and the two accounts are confusing to me. HELP!!
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Author: harveyivory Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17195 of 25265
Subject: Re: 401K novice Date: 3/4/2004 6:09 PM
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A lot of what you have said makes me nervous about your company's 401k plan. It bothers me when our Human Resources department says something that does not match what our Payroll department says. But I work in a 1500 employee company, and things can get confused or take time to get all the information where it needs to be. Your case sounds like a small family run operation. If nobody can give you a straight answer about your investment options, your account balance, past performance of these investments, or anything like that, I would be very concerned about giving them some of the my retirement money. And then you mention Bosses had put it with their financial planner, which sounds like it is not in a separate fund away from other company finances, and may be tapped if the company needs money. This sort of thing happened to a friend of mine when the company he worked for went bankrupt, and the employees lost many months worth of 401k contributions.

I made some assumptions; so if some of this seems off topic with your post, please update the thread.

But given this situation, and assuming your novice status, I would try to find somebody else in the company who is invested in the company 401k to explain it to you. Then make sure that the information they gave is not biased by being a family member. Also, your financial planner is likely not the problem and is correct to be asking for plan documents and investment options. Continue down that path to try to get something in writing from you company. Finally, you may want to consider starting an IRA in the mean time.

Good luck.

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Author: FuskieFool Big funky green star, 20000 posts Top Favorite Fools Old School Fool Ticker Guide SC1 Red Winner of the 2010 Rule Breakers Challenge Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17196 of 25265
Subject: Re: 401K novice Date: 3/4/2004 6:41 PM
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You usually can not roll over a 401k while you are still working for the sponsoring employer. It is also the norm that there are pre-defined investment options, although you can self-direct in which of those options you choose to invest. Some plans actually let you invest in individual equities, but I am not familiar with them. I can tell you with what I am familiar.

What concerns me is the actual location of the money. The employer is supposed to contract with a benefits manager such as Fidelity who is responsible for providing you access to your account, documentation on your account and investment options. The employer has a specific period in which they have to transfer the funds deducted from your pay check to the 401k providor. Pre-determined investment selections should kick in to purchase shares in your selected fund.

It may be that one of the options in your 401k is a mutual fund and without any selections to the contrary, your contributions are automatically placed in the most secure vehicle. 401k's are federally regulated so unless you are being scammed, someone has to be following the rules. Find out who and then get the information you need.

Fuskie
Who thinks that if your financial planner does not understand how 401k's and rollovers work, they may in fact be incompetent...

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Author: jayhawk8666 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17198 of 25265
Subject: Re: 401K novice Date: 3/5/2004 11:31 AM
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I very much appreciate your responses so far. They confirm my concern that the accountant doesn't understand or isn't doing this correctly. I want to add a little more info and see if that helps get more advice.

Company had profit sharing when I started. After one year of employment, they told me "We deposited $8000 in profit sharing this year." They had set-up an account for me with GN Financial (the person they used for personal investment issues). It is set-up with the partners (law firm) as trustees FBO me. They told me that they just put it into money market and I could move into a different investment or completely away from GN if I wanted. I am inexperienced in (scared of) investing so I did nothing with it. The next year they deposited similar amount.

In October of the third year, they announced that they were shifting from ps to 401K. They would not be making ps deposit this year and I had until the end of the year to put in up to $11,000 in 401K. Myself and 1 secretary met with EIP (apparently the employee benefits company that helped bosses create/select the plan). They said we needed to set-up accounts with own broker/financial planner. They new ps accounts were with GN and said we could use him or move elsewhere. I elected to stay with GN. I called and he set-up another account--employer as trustee fbo me. I understand how to put in money and have been putting in a good amount. Employer has safe-harbor match of 4% of my salary with discretion to put in more.

In November of this year (about 1 year into the plan) employer's wife says that they have moved all of their money from GN and he wants me and secretary to move ours. Her stated reason is because our monies are all in money market and he's not making any money off of us. She says we can move to any planner that we want and just have to make sure that the accounts are set-up with the correct titles or we'll have tax problems.

I contact CPA/CFP who says we can roll ps into IRA. Still not sure whether he thinks we can roll 401K into IRA--I still work for the company. As I mentioned before, he's asking what are 401K investment options, etc. I finally get "summary plan description" from boss' wife after she denied having it, told me to call EIP, etc. This document does not set out any investment options (It also doesn't tell me other things like information about taking a loan from 401K--which I don't want to do anyway.) My new guy is still calling her trying to get information: How's this 401K set-up? Who's the plan administrator/benefits manager? What's the account number with GN? What's the balance? Where are quarterly statements? She thinks he's being an incompetent pain in the ass and "making this harder than it has to be." I hear she said the same thing about secretary's planner.

I can't tell boss his wife is retarded but isn't she? Have they broken any laws by not providing me with statements, etc. Isn't there some entity who should be "running" the 401K for everyone. For example, she was sending checks every pay period to GN for secretary's and my 401K contribution. She tells me now she's going to be sending bi-weekly checks to my financial planner. I'm guessing this is really why GN doesn't want to mess with it anymore. Can anyone provide more help based on this? I want to got boss and tell (somehow) that she doesn't know what she's doing but I want to be more comfortable that I know what I'm talking about when I do. She has boss convinced that my financial planner is an idiot and has gone so far as to send me an CYA email--I feel Tom and I have a fiduciary duty to warn you that he does not have our confidence . . .


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Author: harveyivory Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17199 of 25265
Subject: Re: 401K novice Date: 3/5/2004 1:01 PM
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My company had a profit sharing plan, but the company contributions to the profit sharing plan when straight to our 401k administrator. Starting this year, they switched to an employer matching plan. But all of this money has gone to our 401k. Many years ago, we switched 401k administrators, but we have always gotten quarterly statements, and during the transition I was able to get a final balance and the old account a starting balance at the new place. I think your Financial Planner is asking the right questions, but I have never heard of a 401k where you can pick your own administrator. There are people on this board who set up 401k plans for a living, hopefully they will be able to respond and offer some advise.

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Author: SisypheanFool Big red star, 1000 posts Old School Fool Motley Fool One Everlasting Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17203 of 25265
Subject: Re: 401K novice Date: 3/5/2004 4:00 PM
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Have they broken any laws by not providing me with statements, etc. Isn't there some entity who should be "running" the 401K for everyone.

They are required to provide an annual statement at a minimum.

The compliance guide for the plans are summarized in the following brochure.
http://www.dol.gov/ebsa/pdf/rdguide.pdf
Look at Page 2 in the 3rd row of boxes. This spells out that an annual report is to be automatically sent every year to all participants and beneficiaries
Go to Page 5 on the 1st row. This dictates that an individual benefit statement must be furnished within 30 days of a written request.

Go to this page:
http://www.dol.gov/ebsa/FAQs/faq_compliance_pension.html
Look about 2/3's of the way down and look under the heading:
What is the role of the U.S. Department of Labor in regulating pension plans?

There is a hotline phone number to call to speak to someone about compliance (or lack of) with the reports that are due to you.

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