Their are three ways to maintain your investment in your old 401-k account. First is to keep the funds in your former employer's plan. The second is to roll the funds over to a self-directed IRA or to your new employers 401-k plan. The third option is to distribute the funds directly to you which will generate a taxable income event and if under 59 1/2 years old a 10% penalty. If you are doing option #2 or 3 you need to contact the plan's Third Party Administrator (TPA) or your former employers Human Resources Department depending on the size of the company and plan. They will forward you a document that reflects which option you have chosen for your funds. Transfer of funds should take from 7-21 days to complete.
You may receive a distribution from your 401-k when one of the following events occurs: •The participant dies, becomes disabled, or otherwise has a severance from employment. •The plan terminates and no successor defined contribution plan is established or maintained by the employer. •The participant reaches age 59½ or incurs a financial hardship. • Plans with loan provisions would allow you to borrow up to a maximum 50% or $50k from your account and avoid possible taxable income issues
In some circumstances, the plan administrator must obtain the participant’s consent before making a distribution. Generally, consent is required if the participant’s account balance exceeds $5,000. Depending on the type of benefit distribution provided for under the 401(k) plan, the plan may also require the consent of the participant’s spouse before making a distribution. A plan may provide that rollovers from other plans are not included in determining whether the participant’s account balance exceeds the $5,000 amount.
If a distribution in excess of $1,000 is made, and the participant (or designated beneficiary) does not elect to (i) receive the distribution directly or (ii) make an election to roll over the amount to an eligible retirement plan, the plan administrator must transfer the distribution to an individual retirement plan of a designated trustee or issuer and must notify the participant (or beneficiary) in writing that the distribution may be transferred to another individual retirement plan.
There should be a phone number on your statement. You can always check Brightscope's Retirement Plan Search and after searching for your former employer's plan, click on the Form 5500 tab and find the contact info for the plan sponsor. Keep in mind if you are under the age of 59 1/2, there will likely be a 10% early distribution tax penalty in addition to income tax for any withdrawals.
It is not clear from your question, if you are looking for a partial distribution, full distribution, or you are just looking to roll over your 401(K) into an IRA so it is more easily manageable and/or accessible. Maybe you are looking to take out a loan or get an RMD?
If you have found your answer through the previous responses to your question, then you don't need to answer the above. Otherwise, feel free to give me a call or send me an email (www.endowmentwm.com).
If you can't find your old statement, you can also ask your former human resources contact for information as well. There is likely a form you will need to fill out and submit (sometimes over the phone) and it might require your former employer to sign off. Definitely don't forget about taxes and penalties!
Tammy, you need to contact the plan administrator. If you can’t find the phone number on the statement, just call HR and ask for it.