Two Company 401(k)s?

[Guest JetService]

Please forgive what I suspect is a dumb question, but my company, owned by a public company, was sold to a private investment group. This instigated a new 401(k) plan. 40% of my original plan was the public company's stock. Just after the sale, the employees were given documents to rollover the old 401(k) into the new plan.

Being the procrastinator I am, I missed the 90 day deadline to turn in the paperwork. Panicked, I asked them what this meant. It was explained that I only had a deadline after the paperwork was filled out and notarized (I'm on a joint plan with spouse). All I had to do was file new paperwork for a new 90 day deadline. Well during this time, it so happened, the original company's stock went vertical and that plan increased in value significantly....in the meantime, my new plan didn't do much of anything...so now I'm thinking its better for me to leave the old plan as is. Of course I realize the opposite could happen, but knowing the company well, I'm confident that won't happen.

My question is, can I do this? Can I hold two company 401(k) plans at the same time? I have NO idea if I'm under same time limit or even if there are legal issues. I realize I'm not contributing to the old plans, but nonetheless, it is performing better. Thanks for any information

[QDROphile]

If your account balance is more than $5000 (or maybe less), you can maintain your account under the old plan. New contributions will go into your new plan. You may have both. Your account may get charged maintenance fees under the old plan that were not charged before.

None of my business, but 40% investment in a single company stock does not seem like a good idea for a retirement fund.

[Lame Duck]

One thing to think about on the company stock is that you may be entitled to special tax treatment if the stock is distributed to you in kind from the plan of your former employer. You may be able to treat any gains over the contribution amount as a long term capital gain and you may be able to receive a distribution of the stock without being subject to the 20% mandatory withholding on distributions from a qualified plan, depending on what else is distributed with the stock. You may lose the capital gains treatment for the stock distribution if it is rolled over into another plan since the distribution would no longer be "employer securities". You should consult with your CPA before you make any decision about rolling over the prior 401(k) to your new 401(k).