Delay in distribution of my retirement plan. What to do?

[Guest mmcarp]

I left my job in 12/98. I was an 8 year member in a profit sharing plan w/ my former employer.. which is called "XYZ Corp Retirement Plan & Trust". In mid Feb. of this year I provided a completed "election of method of payment" form, requesting the plan distribution to be rolled over to my new employer's 401K plan. It is now 6/10 and the payment has not been made. After numerous calls to my prior employer, I rec'd a copy of a letter my former employer sent to the "benefits administrator" at a bank, which indicates at that time my former employer ordered the draft in a sum certain to be distributed to my new 401k. I have even called since that letter, and I feel I am getting the run around.

I know of other former employees of this business that have had similar problems.

What can I do. Also, can I order plan documents so I can verify that they are sending me the correct amount. How do I order those documents and what documents do I order. I have heard that my former employer has miscalculated or underpaid former employees in the same situation as me. Seems to be a pattern of delay of distribution, and underpaying of distributions.

Thanks for any help. mmcarp@megsinet.com

[Kathy]

Yes, you can and should receive a copy of the plan information. I would suggest sending a letter requesting the information you want (statement of account and perhaps a Summary Plan Description) by way of certified mail and keep a copy for your records. However, if they don't respond within a reasonable time (30 days), you then have to decide your next course of action. Seeking legal advice might be best at that point. The Department of Labor might be interested in your concerns if there are a number of participants affected but they don't have the man-power or money to chase down every individual complaint.

I would also like to point out that it is not unusual for plans to postpone distribution until after a break-in-service has occurred or even until after the end of the following plan year. The employer may have told the administrator to pay you out but the adminimstrator is bound by the document and the plan's policies and provisions. The plan administrator may be holding on to the employer's request until the time required by the plan passes. Delays in retirement plan distributions and transfers/direct rollovers don't always signal foul play.

One more point. Employer contributions are not due until the tax-return due date of the employer plus extensions. It is possible that they are waiting until all employer contributions have been made and the plan year completely closed before they pay you out. This may not be all bad for you.

[This message has been edited by Kathy (edited 06-11-99).]