Employer Holding 401K after Layoff

[Guest Dickey]

I am over 55 and I just got a 2 week notice to be layed off. My employer says I can't get my 401k until renewl time which is Jan 2010. What can I do to get my money?

Thanks,

Dickey

[Kevin C]

The plan document will say when you become eligible for a distribution. The place to start is with the Summary Plan Description (SPD). It should say when distributions are paid. If you don't have a copy, give your employer a written request for one. Let us know what it says.

It is fairly common for plans to say a terminated participant is eligible for a distribution after the end of the plan year in which he terminates employment. But, whatever they do, it has to be written into the document.

Note that they will have a reasonable amount of time to get a distribution paid after you become eligible to receive it. If the plan says distributions are paid after the end of the plan year, that doesn't mean you will get paid on January 1.

[K2retire]

As frustrating as it may be to wait, it is often to your benefit. For example, if you take a distribution now and the employer contributions that you are entitled to later, you could end up having to pay a second distribution fee for that amount later.