takeovers and 401K

[Guest Amy Hall]

Company A has employees participating in a 401K.

Company A was bought out by Company B, who has 401K program.

Can employees of Company B elect to rollover their 401K into their own IRA accounts, outside of Company B's program?

[Guest consultant]

No. Employer B and its participants are not affected by the purchase of company a or its employees. If you were an employee of Company A, then possibly.

Is this a merger of plans or termination of Company A's Plan? If it is a merger of one into another and the document does not allow for in-service withdrawals, then the balances can not be rolled to an IRA.

If the first plan is going to be terminated and the participant will become eligible under the new employer plan, then the participants can have the option of rolling to an IRA.

Company B employees cannot rollover their balances to an IRA without a break in-service, unless the plan document specifically allows for in-service withdrawals.