interestedparty

This is probably my final post on this topic. I am not unaware or disrespectful of the value of this industry The more I consider this the more I believe this is a regulatory loophole that eventually will bite someone and some company I would run from this as a firm I have been thinking about built in systemic protections regarding other large cash transactions in banking and other parties and I can't think of any process that leaves the consumer so unprotected In credit cards there are protections for even the smallest unauthorized transactions. Same for banking - no regulator would accept a process whereby groups of individuals with all this information handle live checks without many systemic checks and balances These checks have no systemic protections and simply should not be handled by a non financial institution There is simply no upside and many risks which is why the financial industry is so regulated Puzzles and alarms me - as it should all of us As this is an optional process I hope I have influenced some partipants of this forum to restructure this process to avoid direct handling of checks if they have the power to do so Thanks for your consideration and for what I am sure is excellent service on behalf of your customers

Well, first of all, thanks for the other viewpoint. I must say in all fairness that I have interacted several more times with my non-financial 401k administrator and so far have been nothing but impressed with the individuals there, their knowledge and their responsiveness. Kudos to those that represent this industry. I remain unconvinced however that there should be not be a separation from the administration of the spousal consent (and whatever mysterious background checking must occur) and the actual sending of the check to the 401k non-financial administrator. Although I may not be a part of the tribe, none of these arguments above show me a reason that the financial institution can't obtain a clearance from the non-financial 401k by sending me the forms, doing the due diligence, and then arranging for the financial 401k to send me the check directly. As a matter of fact, my financial institution said that some companies do manage their 401k loans for their employees that way. I remain unconvinced as well that receiving a direct check for a large amount of money sent directly to a group of people with all the financial details of a customer- remains wise. (This is well over 10k by the way I just didn't want to get into it). No matter how much they make. Let's look it from the other way. Suppose an individual decided to cash that check. He or she would have many tools at their disposal to make it very difficult to trace. I wouldn't wish that situation on my worst enemy. It seems a simple pre-caution to simply not provide that opportunity or temptation. SOP doesn't trump common sense

As far as governmental filings - there are non whatsoever for a 401k loan. So that argument doesn't fly. It is only if a loan is in default that taxes are involved. The financial institution is the source of that info - not the non-financial. So there is no value in their involvement whatsoever, unless you are of the belief that financial institutions are completely unable to verify forms. That is a stretch.

Thanks for your viewpoint. All I know is, I'm sending 10K to a group of 10 or so employees who probably make won't see that amount of money in aggregate their whole lives, who have every type of information about me, and who could disappear with my money and identity in a heartbeat. As opposed to the simple expediency of having my 401k financial firm send me my money directly, them to me. What a concept. I just don't see any advantage to this "insertion." If the check gets lost enroute, cancel and re-issue. But identity theft, that is months perhaps years of redress. Weighing one against the other - this particular SOP makes absolutely no sense. Unfortunately these processes, which are clearly established to benefit the corporation and not the individual they are "serving" all too often become in hind-sight ridiculously obvious. I just hope it is not my particular check / case that shows this industry how far off common sense this particular beaten path has strayed. If you MUST justify additional fees and money and hiring for merely wasting time, do so in a way that doesn't invite identity theft on a platter.

I am an employee of a large tech company. I have worked there over 5 years and have accumulated quite a bit of cash in my 401k. I have decided to take out a loan for a very favorable real estate transaction. In looking into this process, I have been informed that I must submit a form to the third party (non-financial) 401k administrator for my firm. I have to obtain forms from the financial 401k firm, then submit them to the non-financial 401k firm, who blesses them and sends it to the financial firm, who sends it back to me. This is annoying but I guess I can live with it. What has me very worried is that the actual check, which will be large as it relates to real-estate (over 10k), is sent to my non-financial 401k adminstrator first, then from them, to me. Is this legal? It must be. If so, why? Why should anyone else but the financial institution know what my loan status is? Why should my check be sent to anyone but me? What about identity theft - isn't this situation begging for it? What possible value could there be in sending checks across country to administrators? This is my money.