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401k withdrawal denied?

They said, The distribution timing for this plan is the second plan year following severance from employment. The final date of employment we have on record is 9/4/2015. Please submit your request in 2017 for your FBO account. As for the pooled balance, you will be eligible once the balancing has been completed for 2016.

Jan 14, 2016 by Terry in  |  Flag
4 Answers  |  7 Followers
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Peter C. Karp Level 20

Terry

As the other advisors pointed out, reviewing the Summary Plan Description document (SPD) is the first step to determining the distribution options and time frames associated with your specific plan. There is no rule of thumb as each Plan’s document tends to have its own special features. If you have terminated employment, any money that you have contributed to the plan is 100% vested and can typically be rolled over to IRA account, transferred to a new employer’s 401(k) account (if the plan document allows) or distributed to you in cash as a taxable event and with possible penalties depending on your age. If there are any employer contributions there can be different rules and vesting schedules. Once you obtain the SPD speak with the plan’s financial advisor, the HR Dept. or gives us a call to determine what options are available to you.

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Comment   |  Flag   |  Jan 19, 2016 from San Francisco, CA

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Ask for a copy of the Summary Plan Document where this will be spelled out. Generally, distributions are available upon termination but not always

Comment   |  Flag   |  Jan 14, 2016 from Manhattan, NY

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When you enrolled in the plan, you should have been given a Summary Plan Description (SPD). It is the layman's explanation of your rights under the plan. It should cover when and how you can take money out of the plan. If you don't have a copy of the SPD, get one from your HR department. Be sure it is dated prior to your date of hire. If the distribution policy and/or requirements are not in the SPD, ask HR for a written copy of the rule they are siting and the date the SPD was amended. If they can't/won't provide the information to you, your next call should be to the regional office of the U S Department of Labor. HR people don not like to receive phone calls from the Department of Labor. The advice above is from experience. It is not offered as legal advice nor should it be construed as such. Best of luck with your pursuit.

1 Comment   |  Flag   |  Jan 14, 2016
Corey Anthony Purkat

Hi Terry - Both Robert and Charles make good points. That being said, can you specify "THEY" as in, who was giving you this information? Was it your former employer? Was it the recordkeeper aka where your money is being held? Did the employer you worked for close their business? Is your money held in some type of "Guaranteed" account? The reason I ask these questions is because there are only a very few instances where you can't get your money super quick - and even fewer instances where someone says to try again in a year. Let us know on this forum how we can help - and a reminder too - no need to share anything that you don't feel comfortable about.

Flag |  Jan 14, 2016 near St Paul, MN

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As both people mentioned above, the SPD is a great source of information. Further, from the little you posted, it appears they are mentioning two different things: the polled funds and the FBO funds. It sounds like the pooled funds (which are likely the funds you contributed) will be available in the near future, after they have completed the accounting for the plan's year-end. The FBO funds are likely matching/profit sharing the company kicked in. Except in rare cases, the employee contributions are almost always more than the employer contributions. As such, the majority of your balance might be available soon. Again, it's hard to infer too much from you you posted, but my suggestion would be to call back and get clarification on the distribution timing and amounts. Good Luck.

Brian Pinkston, CFA, CFP® Financial Advisor Anchorage, AK

Comment   |  Flag   |  Jan 14, 2016 from Anchorage, AK

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