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Asked 3/29/2010
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My employer is no longer going to contribute to my 401k plan and is going to terminate the plan..what will happen to my 401k What will happen to the money already in my 401k? |
Answer 1/2 - Submitted 3/30/2010
Answer 2/2 - Submitted 3/31/2010
When a plan terminated, there is a process of approval from the IRS. While that is occuring, you will not have access to your money, but it will remain invested in the plan. Once all the paperwork has cleared, you will have the opportunity and ample time to remove the funds, either rolling them into another qualified plan or IRA, or withdraw in cash with 20% tax withheld and penalty possibly due at tax time. If you take no action and too much time passes (usually 6 mos to a year) they will roll the funds to a third party IRA. The funds cannot be forfeited
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