401(a) vs. 401(k)

[Guest vinson7]

Don't know much about 401(a)'s but was wondering why a company would want to move from a 401a to a 401k? Any advantages?

Also, if they adopt a 401k plan, can they transfer the 401a money into the newly established 401k? Could that be done like a provider-to-provider transfer, or would the company have to cancel the 401a plan, establish the K plan, and then each participant would have the opportunity to roll their money into the new 401k plan or an IRA?

Thanks in advance!

On another note- If a company moves from a 403b to a 401k plan, can that work like a provider-to-provider transfer, or does the company have to cancel their B plan and establish a start-up K plan, with the participants having the option to roll their money into the K plan or an IRA?

[Laura Harrington]

Don't know much about 401(a)'s but was wondering why a company would want to move from a 401a to a 401k? Any advantages?

Also, if they adopt a 401k plan, can they transfer the 401a money into the newly established 401k? Could that be done like a provider-to-provider transfer, or would the company have to cancel the 401a plan, establish the K plan, and then each participant would have the opportunity to roll their money into the new 401k plan or an IRA?

Thanks in advance!

IRC 401(a) is the section of the Code that defines a qualified plan. There are many different types of qualified plans. One of those types of qualified plans is a 401(k) plan. Therefore, your questions really cannot be answered based on the data you have provided.

What type of 401(a) plan does the employer currently sponsor? Defined benefit? Money purchase? Profit sharing? ESOP?

On another note- If a company moves from a 403b to a 401k plan, can that work like a provider-to-provider transfer, or does the company have to cancel their B plan and establish a start-up K plan, with the participants having the option to roll their money into the K plan or an IRA?

You cannot directly transfer money from a 403(b) to a qualified plan. If the 403(b) is terminated the employee's can elect to rollover the distributed 403(b) money into the new 401(k) plan.

[david rigby]

... was wondering why a company would want to move from a 401a to a 401k?

A 401(k) plan is a subset of the universe of 401(a) plans.

[Guest Sieve]

And one of the major reasons to move to a 401(k) is to shift to employees more of the employer's cost of providing employee retirement benefits--or, to put a different spin on it, to allow employees the opportunity to improve on the employer-provided benefits.