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Asked 11/10/2008

Can employers hold your 401k over a year after being fired

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Answer 1/3 - Submitted 11/10/2008

The 401k money is yours, as long as you have vested in the program. Regardless if you are vested or not, the money you have contributed is yours. Is the 401K held by the company or a financial institution? If an institution the company is not holding anything. Rather you should contact them and see what your options are for rolling it over to another plan/brokerage.

 
 

Answer 2/3 - Submitted 11/11/2008

Unless there is some other reason they are holding it, they shouldn't be able too.

the only reason they would hold it is that you are not at the age of retirement yet.

 
 

Answer 3/3 - Submitted 3/12/2013

Unfortunately, there is no law that requires your former employer to hand over your 401k funds to you immediately upon leaving. There are several reasons why an employer might hold your 401k balance for an amount of time that may seem excessive to you.

First, how long they can legally hold it depends upon the amount of time specified in the Summary Plan Description (SPD). The administrators of the plan, often a third party, are held to strict Federal laws that require them to follow the the SPD. Each 401k plan has an SPD that spells out how the plan is administered and how often valuation is determined. If a plan is valued annually, rather than monthly or daily, you will not be able to get your money until the annual valuation period has ended.

Additionally, the SPD or plan administrators may also require a yearly audit to be completed before money can be removed.

Ask your plan administrator for a copy of the SPD, then read it to find out what the specifics of this plan are. If you feel you are being strung along and your money is overdue, talk to the plan administrator of your current employer's 401K plan. They may be able to push the process along for you in order to get the money rolled over into the new plan sooner rather than later. (You probably already know that a rollover is a smarter option than withdrawing the money for immediate use. If you withdraw the money you'll have to pay a good deal of taxes and penalties.)

If you have waited longer than necessary as spelled out by the SPD, you could also try sending a certified letter to the plan administrator, demanding payout.

 
 
 
 
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