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How do I change my 401k investments?

Jun 30, 2012 by PEGGY from Buechel, KY in  |  Flag
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Herbert N Glass Level 18

Peggy,

If we assume that your 401(k) plan has "participant directed accounts," you, as well as all other participants, have the right to direct the investments allocated to your account(s) in the plan. On the other hand, if your 401k plan's investments are considered to have only "trustee directed" investing, then you do not have the right to direct your own vestments, because the trustee is the only one that has the right to choose investments for the plan and its participants.

To determine whether the plans investments may be directed by the participants or the trustee, the plan documents and summary plan description should be reviewed. Those documents should clearly state the answer as to who has the right to choose the investments. If the documents state that the participants have the right of self-direction, then it is a simple matter of you talking to the plan sponsor (your employer) or the trustee of the plan, and telling them that you want to take advantage of the documents' provision giving you, as a participant, the right to self direct your investments. If they refuse, you do not necessarily have to hire an attorney, however you may feel free to contact the Department of Labor and lodge a complaint that your employers's plan is not being operating according to the written provisions of the plan documents. You may find that the DOL may either call or visit your employer about your complaint and see that the plan operates properly.

Finally, you should know that some 401(k) plans have some of the participants' accounts using "self-directed" investing by the participants, while other participants' accounts investing is handled by the Trustee. This is perfectly legal as long as the plan documents state exactly how these 401(k) monies are to be invested and directed. So again, the documents have to be read carefully to understand your investments rights against those of the trustee. To get copies of the documents from your employer, you merely have to put your request in writing for them. They are allowed to charge you a fee for providing you with copies of the documents.

3 Comments   |  Flag   |  Jun 30, 2012 from Franklin, MI
Herbert N Glass

Peggy, my above answer may not have precisely answered the question you wanted answered. so the following may more precisely answer your question regarding "how do you change your 401(k) plan investments." Assuming that you have self-directed participant investment rights, the way most 401(k) plans participants change theit investments is as follows:
1. Inquire with your employer if the 401(k) plan investment products sponsor included a Internet website or a toll-free phone number that you may go to or call to make the desired investment changes that you are talking about. If neither of those are available to you, ask your employer for their instructions as to precisely what you need to do to make the investment changes that you desire to make. Your employer may instruct you to call a contact at a brokerage firm or at a bank trust department. They may also suggest that you put your investments change request in writing and send it to the appropriate

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Flag |  Jun 30, 2012 near Franklin, MI
Herbert N Glass

(cont.) person or organization to have your desired imvestment change effectuated.

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Flag |  Jun 30, 2012 near Franklin, MI
Herbert N Glass

(cont.) So, first find out what your rights are to direct your 401k investments, then, if you are allowed to make the investment decisions, find out from your employer or their 401k representative what you need to do to move your investments within your accounts, then last, make the changes you want to make. Herbie Glass, Glass Retirement Strategies, Inc.

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Flag |  Jul 01, 2012 near Franklin, MI

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