401K withdrawal

[Guest JamesU]

I recently went through a costly divorce, along with using poor judgement on some expenditures. I am 34 and living with my parents and am anxious to get out on my own. I wanted to borrow against my 401K to give me capital to do this and my employer would not allow me to. So after 10 years with the same company I quit and took another job so that I could access the 401K money I have. My former employer seems to be in no hurry to release the money to me, it's been about 40 days now. Can anyone tell me what their legal obligation is to me? I know I'm entitled to the money and don't they have a time frame in which they have to release it to me? Also, what is my recourse if they don't?

James

[stephen]

Read your Summary Plan Description to find out what their normal distribution policy is.

In a 401(k) plan the plan can be set up to make you wait until you reach age 65 before paying out.

[david rigby]

Read the SPD is good advice.

More likely than "wait to 65" is a plan provision that defines how often payments are made. For example, it could be daily, monthly, quarterly, annually.

[actuarysmith]

It is likely that the plan requires that you wait until the anniversary date following your termination of employment. If the plan is set up on a 1/1-12/31 plan year basis, then this would mean that you would not be able to take a distribution from the plan until after the December 31 following your termination.

In addition, you might have to wait a couple of months for the plan administration and recordkeeping firm to finish up with the 12/31/xx year end allocation reports and determine your vesting percentage.

If after reading the plans Summary Plan Description (SPD) as recommended in the earlier posts, you still feel as though the employer is remiss in making a timely distribution, you canl call the Department of Labor. (Do not do this unless it appears that the employer is violating the terms in the SPD).

The DOL takes these complaints very seriously and will contact your previous employer immediately. Trust me, your previous employer will get on it quick!