No. of Recommendations: 0
Greetings, ScurvyDog, and welcome.

<<I have a 401k account that was supposed to become a
permanent account (company is forced to maintain account by federal law) at $3500.

A while back in the WSJ they were saying this would go up to
$5000. Is this true for accounts that pre-date the new law or will these accounts under the new min become un-permanent.

Also, does anyone no when this is supposed to happen. Any
details would be appreciated.>>

The Taxpayer Rekief Act recently signed into law raises that limit to $5,000 effective with plan years beginning after enactment. In most cases, that means in 1998 retirement plans may force a distribution to terminated partcipants if their
accumulated benefit under the plan is $5K or less. Those forced to take a distribution may transfer those amounts to an IRA to delay taxation until retirement. The law is silent on "grandfathering," so my educated guess is if your balance is under $5K when your old plan's new plan year starts (probably after 1/1/98), then you will receive a forced distribution.

Regards........Pixy
Print the post Back To Top
Advertisement