The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing

URL:  http://boards.fool.com/greetings-jack2-and-welcome-ltlta-good-10084612.aspx

Subject:  Re: 401(k) handling Date:  1/19/1998  9:10 AM
Author:  TMFPixy Number:  1376 of 76384

Greetings, Jack2, and welcome.

<<A good friend got laid off from a job at about the time the boss sent all of the employee 401(k) funds to be managed by a money manager who was a friend of his. My friend wanted to manage her money herself, perhaps by converting to an IRA, but he said she could not do that -- her funds had to go with all of the other funds to be managed by his friend the money manager. We were skeptical at the time and we remain skeptical, but we know next to nothing about this. We wonder if anybody knows if she can take control of her funds and move them to an IRA account with something like VG Index 500, under her control from then on, from a collection of load funds they were put into. We realize that she has already paid commissions through the loads and may have to pay more, but it is the concept we are asking about. What rules govern this sort of thing, and where do we find them?>>

JeanDavid and Bacon gave you some excellent guidance. I can't add much except to point out that her ex-employer is more likely to be misinformed and ignorant about 401k distributions rules as opposed to deliberately fostering fraud. That is common with small employers. IMHO, a simple, polite letter to the current plan administrator requesting the administrative procedures that entity uses for a direct transfer of the funds to an IRA is more in order than a threatening letter. Use the latter only if the first request for information is rebuffed, which is highly unlikely. Armed with the administrative procedures, you should be able to accomplish the transfer with the least possible hassle.

Regards.....Pixy
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us