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Removal of Stop place on 401(k) Assets


Guest Becki625

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Guest Becki625

I have been informed that a termed employee wants to roll their money into their current employers 401(k). It appears that the prior administrator put a stop on the account, in anticipation of receiving a DRO back in 2001. The ppt. can not roll over the money because of the stop. I found no record of a QDRO and the trustee says that there has been no transfer of funds.

Does anyone have any suggestion as to I should receive from the ppt. so that I can remove the stop? Divorce decree?

Your assistance is greatly appreciated.

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How about the idea that even if the "stop" was legitimate in the first place (questionable), it is not appropriate for such a long time. This would be an easy response if the particpant has been eligible for a distribution for 18 months, but that is not a necessary condition.

Get some intelligent QDRO procedures (rare) in place, then notify everyone that the plan will distribute the account within 60 days unless the plan is provided with appropriate reasons for postponing the distribution.

Other approaches are possible and don't forget to take into account the documents that the plan has (its own and the communications about the account -- especially what caused the stop).

The plan administrator may be liable for inappropriate interference with the distribution. See Schoonmaker v. Employee Savings Plan of Amoco Corp., 987 F2d 410 (7th Cir, 1993).

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Guest Becki625

Thanks for the quick responses. I will be undergoing an administrative audit of the plans and will keep note of this for the QDRO procedures.

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