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Hi Fools,

Previously someone asked:

<<Is there a time limit on 401 K rollovers once you leave your current place of employment? >>

TMFMax replied:

<<No, none that I'm aware of. As long as you have over $5000 in a plan, the company has to allow you the option of leaving your money in the plan, and you should be able to roll it out of the plan at your leisure.>>


So my question is:

How about if the amount left in the plan is LESS than $5000? I know that the company/administrator is not forced to allow you to leave the money there, but does there exist any timeframe in which they can ask you/force you to move the money out?
Any clarifications would be appreciated.

MasterQi
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There is no time limit to remove your money from your former employer's plan regardless of the size of your account.
Since companies are usually charged a per participant fee by the plan recordkeeper, employers are allowed o automaitcally cash out former employees who have a balance of less than $5,000. IF there is more than $5,000 the employer must obtain the employees' signature before cashing them out of the Plan.
There is no time limit for cashing someone out with less than $5,000. They should allow you a resonable time to make a withdrawal decision.
Most employers will not cash you out imediately, for if they do so the check will be made out to you and 20% will be withheld automatically. The employer should, upon termination of service provide you with a withdrawal election form. If this form is not turned in withhin a reasonable time, then the employer is fre to cash you out. Most employers consider 30 days reasonable.
However, there is no written regulations that specify 30 days.
Hope this helps.

Bill
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