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Employer holding 401K funds for one year Michigan

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  • #16
    There again, get a copy of the summary plan document/description & read it.
    Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

    Live in peace with animals. Animals bring love to our hearts and warmth to our souls.

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    • #17
      Also contact that named financial service provider...I have used that specific firm and have gotten accurate answers even when others have been garbled ....as to plan information ..they do not dispense legal advice, of course. Some employers may not know what is in own plans ....source docuements sure would help....

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      • #18
        The ONLY source that matters is the plan document.
        The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

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        • #19
          Plan is sort of key starting point....but the words are not absolute ....odds are if Fidelity is administering it then it is clean starting point...but if somebody did not use an approved prototype plan or get an IRS determination letter it may get murky .

          ( My employer plays some games at funding deferred compensation plans that probably would never pass a smell test ....Im not saying OPs employer is playing games..just that games exist ...)

          BTW I just made a withdrawal from such a plan at said firm just yesterday ...it's really been a while since I read the fine print of the plan..but recall some jargon about it being an approved prototype ..Anyhow the computer system allowed me to make the shifts I desired ...and Ive had no problem with custodian to custodian transfers either and I have more plan descriptions from them than I Could ever read....

          I t may or may not help to ask the plan administrator..but it sure is not hard to ask.

          BTW the investment choices on my plan with Fidelity are pretty darn broad ...no need to rush to withdraw on that score ......Oddly, one of my children has a similar plan set up by a major institution and using A different major financial service provider ..and they put in some rather limited investment choices and some wacky stacked fees....

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          • #20
            Whether you like it or not, Raster, this is the bottom line:

            If the plan document allows for a year's wait for a distribution, or if all distributions are made at the same time which happens to be a year from how, then the ONLY legal time to make a distribution is a year from now. The regs for employer-sponsored plans are very clear on that. Nothing the vendor says can make that regulation go away.
            The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

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            • #21
              The OP can certainly contact the financial service provider if they wish & ask questions but, of course, again - plan document/description rules.
              Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

              Live in peace with animals. Animals bring love to our hearts and warmth to our souls.

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              • #22
                Originally posted by Raster
                OP ...as others correctly note...your plan may vary and it is important to read "YOUR " plan ...

                But the Fidelity approved prototype 401(k) plan often used by smaller employers , at least on first review does NOT have any such distribution restriction and it spells out the necessary steps to trigger a distribution ..its on line

                My personal view is that a qualified roll to a IRA may provide greater flexibility and lower costs than many an employer 401(k) but that is sort of your call and your homework.
                Raster, no "buts" her plan document rules.

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                • #23
                  Originally posted by Raster
                  OP ...as others correctly note...your plan may vary and it is important to read "YOUR " plan ...

                  But the Fidelity approved prototype 401(k) plan often used by smaller employers , at least on first review does NOT have any such distribution restriction and it spells out the necessary steps to trigger a distribution ..its on line

                  My personal view is that a qualified roll to a IRA may provide greater flexibility and lower costs than many an employer 401(k) but that is sort of your call and your homework.
                  First, Raster, you have no idea what model her employer uses and what it says.

                  Second, unless you are a licensed broker you have no business making recommendations as to her investments. Particularly not based on the limited information available on a message board.

                  That's it. You've stepped over the line one too many times.
                  The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

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                  • #24
                    As I think I've mentioned previously, I work for another retirement plan provider. Prototype in the context of a retirement plan does NOT mean that the provider offers one plan document for everybody, nor does it mean that you can review the plan document for one Fidelity plan and say that its terms and conditions apply to another Fidelity plan. Prototype distinguishes one type of plan document from the other type, which is called volume submitter. You can google articles about the differences between the two. Essentially, prototype means that it has been approved by the IRS and, thus, that it conforms to IRS regulations.
                    Last edited by Marketeer; 01-15-2015, 09:43 AM.
                    I am not able to respond to private messages. Thanks!

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