Guest cris Posted October 28, 2001 Posted October 28, 2001 Hi I have company stocks in my 401k. The company is not public. I got laid off and I wonder if I am closing my 401k, will I get the cash value of these stocks? I need to know my rights, as I suspect foul play.
GBurns Posted October 28, 2001 Posted October 28, 2001 What do you mean by "closing" your 401(k)? Are you not going to make any more contributions because you are no longer an employee, or are you rolling it over to another qualified plan, or are you getting a distribution because of liquidation? What are you really doing? George D. Burns Cost Reduction Strategies Burns and Associates, Inc www.costreductionstrategies.com(under construction) www.employeebenefitsstrategies.com(under construction)
Guest cris Posted October 28, 2001 Posted October 28, 2001 I was laid off. I can keep the money there, but the company is going to move to Texas. There are many not so legal things going on and I don't know how to protect my stocks in this non-public company.
david rigby Posted October 28, 2001 Posted October 28, 2001 First things first. A distribution from a 401(k) plan cannot occur unless you have a severance of employment (in general, although there are some exceptions). Are you stating that your layoff was a severance of employment? If so, then look to the terms of the plan to see what options there are. For example, if the value of your account(s) is $5K or less, then the plan might (but not necessarily) state that your account will be distributed to you. If over that amount, it may be distributed, with you being the one who decides. In either case, you should be given the option of receiving the distribution in the form of a direct rollover to an IRA, or paid directly to you. The latter case requires a 20% withholding for federal tax purposes. Locate, and read, a copy of the Summary Plan Description (SPD). I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
Guest cris Posted October 28, 2001 Posted October 28, 2001 Yes, I am more than certain this lay off is severance of employment. There might be a lawsuit in the works on that, but my main concern is the $2500.00 in company's stock. The Company is not public. Can I somehow lose that money or have it taken away? Thanks Cris
GBurns Posted October 29, 2001 Posted October 29, 2001 Sell the stock since you have no confidence in the continuity or performance of the stock. It cannot be taken away from you but it could be rendered valueless. George D. Burns Cost Reduction Strategies Burns and Associates, Inc www.costreductionstrategies.com(under construction) www.employeebenefitsstrategies.com(under construction)
david rigby Posted October 29, 2001 Posted October 29, 2001 If the stock is not publicly traded, then the Plan likely has an option for you to receive it in cash. Might be a requirement, since there might be a requirement that all stock be owned by employees. Check the SPD. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
Recommended Posts
Archived
This topic is now archived and is closed to further replies.