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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.

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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.

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