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Resurrected 401 (k) account


katsr
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A few months ago I discovered some paperwork for a 401(k) I forgot about and left with an ex employer about 8 years ago. The employer is famous for discontinuing benefits like this, profit sharing, etc. and keeping the money instead of dispersing it. He now refuses to acknowledge the existence of this account even with hard copy proof. A gentleman from the Dept. of Labor has contacted him a few times for me with no response.

Anybody have any ideas?

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Send a nice CMRR to your States AG, Check to see if your state has a "Bad Faith Law" you might be able to get a little extra bang if it applys to your situation.

If the AG does no good, go talk to a contract lawyer......get all you can from the labor dept before hand, but mostly I find them useless.

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DHK- aren't 401k monies allocated and titled in the earner's name? It would seem that it would be fraud for the company to yank those funds for its own use.

Pensions are different. There ordinarily isn't a contributory portion and it isn't uncommon for struggling comapnies to underfund. This is quite different than a 401k that is allocated to an individual.

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Excellent input as usual from the CIC folks! Thanks a million! Today I received a copy of a letter that the DOL sent to the employer asking him to respond on the issue within 10 days in order to avoid a "benefits dispute." I'll send off my own CMRR per your suggestion but with some much stronger language.

The account was worth 2k eight years ago. Even if it's only worth $10, it's not his to keep.

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DHK- aren't 401k monies allocated and titled in the earner's name? It would seem that it would be fraud for the company to yank those funds for its own use.

Pensions are different. There ordinarily isn't a contributory portion and it isn't uncommon for struggling comapnies to underfund. This is quite different than a 401k that is allocated to an individual.

Yes, it would be fraud. However, it is more likely that the plan is just not in compliance and not closing out non-employee participant plans - or sending out the required notices.

There are plenty of people involved in the 401k - the business owners/employee benefit managers, trustees of the plan that choose and approve the investment selection choices and accept fiduciary liability, the Third Party Administrator and the investment broker for the plan.

There are lots of moving parts and lots of people involved.

Here's something else: You can sue for losses in your 401k if they didn't properly execute trade instructions &/or keep the plan in compliance.

http://www.marketwatch.com/news/story/401k-holders-get-right-sue/story.aspx?guid=%7B1BFB12AF-815C-4177-AC69-EFEA889E8C76%7D

Send your old boss THIS link, and I think he'll be willing to get moving on getting you those funds!

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Excellent input as usual from the CIC folks! Thanks a million! Today I received a copy of a letter that the DOL sent to the employer asking him to respond on the issue within 10 days in order to avoid a "benefits dispute." I'll send off my own CMRR per your suggestion but with some much stronger language.

The account was worth 2k eight years ago. Even if it's only worth $10, it's not his to keep.

Sometimes when plan balances are within a certain dollar amount, they could just send you a check and cash out your retirement plan. Apparently, that can be as high as $5,000.

Do you remember ever receiving the money in a check and you just took it to the bank?

http://www.irs.gov/publications/p560/ch04.html

Involuntary cash-out of benefits not more than dollar limit. A plan may provide for the immediate distribution of the participant's benefit under the plan if the present value of the benefit is not greater than $5,000.

However, the distribution cannot be made after the annuity starting date unless the participant and the spouse or surviving spouse of a participant who died (if automatic survivor benefits are required for a spouse under the plan) consents in writing to the distribution. If the present value is greater than $5,000, the plan must have the written consent of the participant and the spouse or surviving spouse (if automatic survivor benefits are required for a spouse under the plan) for any immediate distribution of the benefit.

Benefits attributable to rollover contributions and earnings on them can be ignored in determining the present value of these benefits.

For distributions made on or after March 28, 2005, a plan must provide for the automatic rollover of any cash-out distribution of more than $1,000 to an individual retirement account, unless the participant chooses otherwise. A section 402(f) notice must be sent prior to an involuntary cash-out of an eligible rollover distribution. See Section 402(f) Notice under Distributions, later, for more details.

Even then, they should've sent you the IRS Special Tax Notice 402f informing you of your rights in regards to employer-sponsored retirement plans. (You can do a google search for 402f to find samples of these.)

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There was a profit sharing account that I did receive a check for, but the 401(k) was in a separate account at TD Waterhouse, now TDAmeritrade. I have the tax ID# and account #. I'll contact them on Monday but I expect them to refer me to the employer.

I sent a very pointed letter to the employer CMRRR citing ERISA and included the link suggested. (THANK YOU VERY MUCH!)

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