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Author: HeftyDude Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: Ch-Ch-Changes... Date: 4/28/2004 5:54 PM
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The company for which I work outsources it's HR and payroll. My benefits and 401k are managed and provided by them. I technically am an employee of that company.

Well, the boss has decided to change HR/payroll companies. My concern is some of the things they are telling us about our 401k and I want to verify it.

I know that if you quit a company, you typically get the option to either cash out and pay taxes and penalties, roll over to a self-directed IRA or roll over to the new 401k at a new job. Aparently in my case, I don't get an option. It all is moving to new 401k (which I might add I don't care for too much).

Here are some buzz words floating around that may help explain the situation: we are currently in a "multi-employer" plan; and the plan is a "non-distributive" plan with my company being a "co-sponsor". If I were to retire and they are "non-distributive" then how do get distributions?

That is all I know. Can someone please put this into English? Do I or should I have an option of what to do with my 401k? It seems like I should have the right to do with it what I would like instead of being told what is going to happen with it?

Maybe I should just quit on Friday and be rehired on Monday (The change is official as of May 1)?
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Author: buzman Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 40750 of 76418
Subject: Re: Ch-Ch-Changes... Date: 4/28/2004 10:07 PM
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I am just guessing so...

Since your employer is changing payroll companies, they are probably changing providers. When your employer changes providers, typically, the plan "freezes" or "locks down" that way assets can't be pulled out etc. Probably, again I'm guessing, after a period of time things should be back to normal.

Otoh, that is what happened at Enron...

buzmna

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Author: HeftyDude Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 40753 of 76418
Subject: Re: Ch-Ch-Changes... Date: 4/29/2004 10:18 AM
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The way I see it, I am going to work for a different company. The plan is not freezing as all the other people that still work for the HR/outsourcing compnay are still using their 401k plan just fine. This is a whole new compnay, and we are merging into their employee pool. So, everything is changing: payroll, 401k, health plans, etc.

I would think that if I am going to work for a different company, that I should have all the options with my 401k that I would have if I quit. But I am being told that all my 401k money has to go to the new plan at the new HR outsourcing company (which will be my new employer).


<snip>
Since your employer is changing payroll companies, they are probably changing providers. When your employer changes providers, typically, the plan "freezes" or "locks down" that way assets can't be pulled out etc. Probably, again I'm guessing, after a period of time things should be back to normal.
<snip>

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Author: Watty56 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 40758 of 76418
Subject: Re: Ch-Ch-Changes... Date: 4/29/2004 12:33 PM
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I've never heard of this but it might be in you favor is there is a company match that you are not 100% vested in yet. If your were essentially fired then hired you would loose the unvested match and have to start the vesting period again.

Greg


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Author: buzman Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 40765 of 76418
Subject: Re: Ch-Ch-Changes... Date: 4/29/2004 10:38 PM
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Didn't realize you were leaving.

Greg is right. There could be some vesting issues.

Could it be that after a period of time you could rollover your 401k to another plan.

Can't you take a distribution and have a 6o period to put it into another plan or IRA. Usually I don't advise people to do that they may forget to put it back in and blame me!

buzman



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Author: HeftyDude Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 40766 of 76418
Subject: Re: Ch-Ch-Changes... Date: 4/29/2004 11:21 PM
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ahem...

I am not leaving the company, that was a little joke about how I might be able to be able to gain some control over my 401k assets.

After speaking with someone today that actually knew the IRS laws, the fact that our company is changing HR compnaies does not create a "distributable event". Therefore, I get no options. All of my 401k will Xfer to the new plan.

And since my company does not match contributions, the idea of quitting on Friday and restarting again on Monday does have some appeal....but somehow I don't think the boss would be pleased with that idea.

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