ESOP Cash to 401(k)

[everybodylovescrayon]

We have several employees with cash in our ESOP. Can we unilaterally move that cash from the ESOP to the 401(k), or do we have to get participants to elect to move the money?

[JRN]

The short answer is "yes" . . . you can do a trustee-to-trustee transfer of assets from one plan to the other.

But, the better answer is "why do you want to do this?" It's usually a good thing to have some cash in the ESOP, for example, to fund distributions. You'll need to prudently invest the cash assets, but typically this cash has a very short investment horizon (depending on your ESOP distribution policy) so it's okay to invest very conservatively.

[david rigby]

The short answer is "yes" . . . you can do a trustee-to-trustee transfer of assets from one plan to the other.

... if permitted by provisions of the plan(s). So, "unilaterally"? No.

[QDROphile]

And think about the rules preserving the ESOP rights of the participants -- it ain't just cash.