Guest PAINPA Posted August 6, 2004 Posted August 6, 2004 5 lawyers from the old firm started a new 401k the same day they left the larger law firm. The new law firm will be in the same location and building they always worked in. The same staff they used will also follow them. So nothing changed other then the name on their paychecks. With all that I have read about the repeal of the same desk rule and the wording of separation and/or serverance... my question is... Do the employees have the option to take their money and NOT be forced to transfer into the new plan? Is the answer to the above found in what the old plan selected in their EGTRRA agreement? Any help would greatly be appreciated.
401 Chaos Posted August 6, 2004 Posted August 6, 2004 Paipa, I think you do raise a valid concern and don't mean this to sound cavalier but in the face of uncertainty it seems any good group of lawyers ought to be able to come up with some reasonable, good faith arguments as to why their new firm is different from the old firm and why the same desk rule ought not to apply if they really prefer to move their money. Furthermore, in the seemingly unlikely event (I cannot imagine the govt. suing a law firm over this) it were challenged, seems a competent law firm would have a strong chance at winning the case.
four01kman Posted August 6, 2004 Posted August 6, 2004 It is my understanding the "same desk" rule only applies to a business reorganization of some kind; that is, a new owner, or a merger and acquisition transaction. This situation seems different in that a new business organization has been formed. I would expect the prior 401k plan could (would) distribute based on separation from service. Jim Geld
RCK Posted August 6, 2004 Posted August 6, 2004 In addition to the name on the paychecks, has the EIN on the w-2's changed? RCK
Guest PAINPA Posted August 9, 2004 Posted August 9, 2004 Thank you for the responses... Yes, the EIN is new... Also... I am the TPA and have no asociation with the broker... however from the broker point of view with eveyone (in all our plans) seemingly wanting to get their money out of the their 401k to pay for the downturn in the economy... I just wanted to make sure they have the option or not have the option of taking a distribution of their money. I guess the broker is concerned with the amount of rollover in the proposal.
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