- quote -

I've handled a half-dozen terminating pension plans, generally older Group
Variable Annuity contracts. All of them had Contingent Deferred Sales
Charges (CDSC, aka surrender charges), and I was able to negotiate waivers
100% of the time (78 total participants from all plans). Advisors that don't
work the qualified plan market aren't going to know how to do this,
unfortnately. The old axiom "its not what you know, its who you know" has
long been replaced by "its not what you know, nor who you know, but who
knows you" -- aided by the knowledge of knowing WHO to ask, and WHAT to ask
for.

The CDSC is there for a reason. An agent or broker was paid to sell the
plan, and although the CDSC is often waived for rollovers due to natural
turnover, plan termination often triggers the CDSC so the plan provider can
recoup their plan acquisition costs.

Negotiating a waiver is simple and straigtforward, generally involving a
quid pro quo.

The lesson to learn here is: Don't leave assets with a previous employer.

If you do, and the plan termniates, you need a really good financial advisor
on your side -- preferably one with qualified plan experience.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

- quote -

- quote -

Check "Back End/"Front End Loads":

http://www.401k-easy-online.com/401k_glossary/

Happy Mother's Day!!!=


"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

The following was cross-posted which is frowned on by moderated
newsgroups. Since it was on-topic for this newsgroup and since the
moderator had some spare time, it is copied below (with corrected
headers).

--------begin copy------------


Subject: Penalty of 4% by 401k custodian
From: rajendran[at]yahoo.com (raj)

Hello,

I rolled over my 401k assets from my earlier company to a rollover IRA
account this month. And the timing was such that (I rolled over
nearly 1 1/2 years after I got laid off) the company's 401k plan was
terminated in February, just 2 months before my rollover.

The 401k custodian (Lincoln financial) applied a penalty of 4% of
the money rolled over citing that the 401k contract specified such
penalty if the funds were rolled over **after** the 401k plan is
terminated. And this penalty amounts to about $1000. My question is:
Is this legal?

There are several rules to protect 401k investors from squandering
their money away (such as cannot invest in options or futures etc).
Are there any rules about the penalty that can be charged by 401k
custodians?

thanks very much for your time.

raj.



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-HW "Skip" Weldon
Columbia, SC