Has anyone moved funds from their existing 401k to an IRA while still with the comapny? Is this ever an option? I knoww if I leave I can roll the funds to another 401k or to an IRA, but I don't know if you can do this while still an employee. I've sent questions to my HR, but I'm still waiting for their response.BTW, I attempted to search the FAQ, but only was sent to www.amazon.com. I'm assuming this was a mistake.Emory
You are at the mercy of your company. They may allow you the option to transfer your 401K to either an IRA or to the new 401K, but it is most likely they will decide for you to move your balance to the new 401K and give you no options.
Emory,If you can NOT move your 401k $'s to an IRA and have to go into the new 401k, I would recommend that you pay close attention to the investments they put you in to in the new 401k. For simplicity's sake, I would assume (note, this is only an assumption on my part) your employer will be offering similar investment options in the new plan as were in the old plan (be they good or bad is irrelevant for my point). When they convert to the new plan, they will "map" the old investment options to hopefully similar ones in the new plan. Assuming, again, that your investment options are mutual funds - your employer will try to select investment options in the new plan that match as closely as possible the old plan's options. This is not as easy as it may sound. To illustrate: you may currently have a Large Cap Growth fund option - this may be mapped to a fund in the new 401k plan which is also Large Cap, but is a Large Cap Value or Large Cap Blend (combination of value and growth stocks). Those are materially different styles - possibly different enough that you don't want your money in them. I'm sure it won't be difficult to change your investment options should you desire to once you are in the new plan. Just thought I'd give you this "head's up", FWIW.KenP.S. Your question sounds like you would like to have more control over these investments (very Foolish!). Maybe your new 401k will offer what is currently still a rare - but increasingly popular - investment option: a "brokerage window." This is essentially a brokerage account in your 401k. A neat idea - I hope my employer offers one soon. Ask your HR department.
My question is: if the company is changing providers and you don't have a choice, who will pay the commissions to transfer to the new funds? Seems to me it should be the company but...Mike
Mike,Let me first say I am not a specialist in this area, but I work very closely with those who are. As you can see in my profile, I'm in corporate banking and my employer provides 401k services to many of my clients.I have never seen a participant in a 401k plan be charged commissions/fees/whatever when the employer changes plan providers. If the investment options in a plan charge backend sales loads (fees that are charged when you exit the fund), I sure hope your employer picks up that cost! Check with your HR department (ever notice how they stopped calling it the "Personnel Department" - I guess they've taken the "person" out of "Personnel" - sorry for the side commentary!)Based on what I've seen, there are no charges to the plan sponsor (your employer) for the "conversion' from another provider. There could be additional costs your employer may incur relating to such things as customized educational materials to be given to the plan participants and stuff like that - usually the employer pays that cost and does NOT pass it to the participants.If you are being charged costs that appear to be associated with a change in plan providers - I'd question it.Hope this helpsKen
I agree. I finally talked with someone. They've decided which provider, but not which funds. I won't be allowed to roll my funds to an IRA. All I can do is submit a request to let us buy stocks as well as mutual funds. Thanks.Emory
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