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What happens to my 401K if my company files bankruptcy?

I've been with my company for 7 years and they just filed bankruptcy. What does this mean for my 401k? What do I need to do to make sure that everything is handled properly?

Jan 20, 2012 by Ann from Philadelphia, PA in  |  Flag
3 Answers  |  5 Followers
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2 votes

Ann, your fine as long as none of your investments are in Company stock. You should reach out to your HR department with specific questions. Best of luck! Evan

Comment   |  Flag   |  Jan 21, 2012 from Port Washington, NY

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2 votes

All of the funds contributed to your plan by you should be segregated from the funds of the company and held by a qualified fiduciary. While you will be subject to market fluctuation depending on the funds you choose, the only downside as noted above by Evan is if you invested directly in company stock. Check you statement to see how and where you are invested.

Comment   |  Flag   |  Jan 23, 2012 from Suffern, NY

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2 votes

Your money is YOUR money! As long as you have no company stock, you have no exposure to the company in this respect. You can contact your plan custodian for options to convert the plan to an IRA. You will also have the option to roll the plan balance to an IRA at an independent custodian such as TD Ameritrade, Schwab, Vanguard, Fidelity, or others, where you will have complete control of the account and investments. If you are not a "savvy investor" you might check out the book "7Twelve: A Diversified Investment Portfolio with a Plan" by Dr. Craig Israelsen, on Amazon, for an idea of how to invest your balance. Or, you can find an advisor who adheres to such a solid strategy. Best of luck to you.

1 Comment   |  Flag   |  Jan 24, 2012 from Arvada, CO
Anne Nickell Comer

Ann, In addition to the above, carefully review your benefit statements to confirm that all your deferrals have been deposited into your account along with any company match, etc.

Flag |  Nov 21, 2012 near Gastonia, NC

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