My company sold in a stock sale. I want to roll my 401K over to anothe

[Guest spike]

Our company sold in a stock sale. We thought we would get to roll our 401K over into a self directed qualified plan. Now the new company says we are required to keep our money in their plan. What could be going on here that would prohibit us from getting access to our money?

[QDROphile]

You couldn't get a distribution under the old regime until you terminated employment. You haven't terminated employment. What makes you think you should be able to get a distribution?

[Guest spike]

I think we should get a distribution because our plan documents say the plan is terminating as of 12/31/99.

[QDROphile]

See section 401(k)(2)(2) of the Internal Revenue Code. Termination of the plan is not an event that allows distribution unless it is an event described in setion 401(k) (10). 401(k)(10)(A)(i) lists termination of the plan "without establishment or maintenance of another defined contribution plan ***." So if your employer has another defined contribution plan, termination is not an event that allows distribution. "Employer" means not only the company that employs you, but also the related group of corporations that includes your company. So if the parent of your company has a defined contribution plan, no distributions.

There are other events listed under 401(k)(10). And listing under 401(k)(k)(10) doesn't necessarily give participants rights to distribution. The plan sponsor may choose not to distribute, depending on the circumstnaces.