Q: I was laid off recently from an employer that provided a 401(k) Qualified Savings Plan. I still have a balance in the plan and want to roll it over into my own personal IRA. When I contacted the financial institution managing the plan, they said I needed to obtain "rollover" forms from the employer. My calls aren't getting returned. Can I get the forms elsewhere? - Eli, Georgia
A: The money in your 401(k) is protected under the rules of the Employee Retirement Income Security Act. Your employer is obligated to cooperate in permitting you to transfer or roll over the assets in your 401(k) into your own personal IRA or into the 401(k) plan of a new employer, if the new employer permits this.
Some 401(k) plans don't require rollover forms from your prior employer. You can have your new employer or IRA manager "pull" the assets into your new plan. In other plans, you must have rollover documents from the previous employer, who then arranges to "push" or "release" the assets into your new plan in cooperation with the new plan managers.
This is normally a routine process, and an employer would have little interest in impeding the transfer to your new plan. It's not unheard of, though, to have your previous employer's plan administrator or fund manager delay the transfer. After all, a transfer would mean management fees out of the employer's pocket. The employer would be well advised not to do this for any extended period of time, but it is up to you to ensure that the transfer takes place once all of the required forms are processed.
So, what steps should you take?
1. Collect information including your Employer's Tax-ID Number and 3-digit IRS Plan ID Number. Confirm the mailing address and contact information of your prior employer. Have your most recent balance statement from the plan. Refer to the Summary Plan Description (SPD) for your plan, or contact the plan administrator, for information regarding rules for rollover processing. Also, find out who the "Plan Trustees" are for your 401(k).
2. Try calling your previous employer again. See if you can't get the forms. If your call doesn't produce immediate results, contact the Plan Trustees (unless they are the owner) and state your demand.
3. If calling the owner or Trustee doesn't produce results, it's time to get tough. Send the owner a certified or registered letter demanding the necessary forms. Copy the financial institution managing the plan. Set a deadline, and tell your prior employer you will file complaints with the Department of Labor and the IRS if the company doesn't comply. It's very likely your written demand will bring results.
4. If the balance in your 401(k) warrants the expense, contact a lawyer specializing in employment and employee-benefit law. The lawyer may simply direct you on how to initiate a formal complaint through the U.S. Department of Labor and the IRS. It may also be sufficient that your attorney contact the employer and plan manager. Whatever you do, don't let any more time pass. Every day increases the likelihood of not recovering your money.
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