kastnna wrote:
- quote -

Good point.

-Will

william dot trice at ngc dot com

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On Apr 19, 4:28*pm, Will Trice <wtr...[at]notmonitored.com> wrote:

- quote -

Not necessarily. It's a matter of timing. Converting pre-tax dollars
may bump up a tax bracket in a specific year but not in another year
and vice-versa. Converting non-deductible dollars doesn't require
paying tax on the contribution.

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On Apr 19, 11:10*am, Mark Bole <ma...[at]pacbell.net> wrote:

- quote -

It is entirely possible that no "cash out" period was provided in this
circumstance. I am not sure whether the cash out offering is required
or just common-place.

I would hesitate to apply your past experience unilaterally. The
pension protection act and ERISA drastically changed the rules since
"some ten or fifteen years ago". Things are much different now. Your
scenario also didn't involve an M&A, just a plan provider switch
within the same company. In an M&A the actual Trust document changes,
not just the plan provider. New trust documents entail new employee
consent. Lastly, you never "severed your employment" which prevented a
cash-out option. In an M&A, you technically "terminate" with one
company and "hire" at another. That severance (although technical)
allows for distribution.

I've opened numerous IRAs for clients that went through this exact
same scenario, but I've never met one that wasn't allowed to cash-out
during the M&A. That's not to say it's impossible, just that I have
never personally encountered it.

- quote -

Not really. With the exception of Sarb-Ox, which largely focused on
limiting the powers of highly compensated executives of public
companies, all 401k plans are regulated by the same laws and internal
revenue code. Descrimination testing, blackout periods, matching, safe
harbor regs, etc, etc... are all the same.

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joetaxpayer wrote:
- quote -

I disagree (with the last sentence). If it makes sense to contribute to
a Roth vs. a deductible IRA/401(k), then it may make sense to convert
pre-tax IRA money. It's really the same decision isn't it?

-Will

william dot trice at ngc dot com

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Dave Dodson wrote:
- quote -

Yes - there's an older thread that went through the pros and cons of the
401(k) to IRA rollover.
My current favorite - When you convert from IRA to Roth IRA (and the
income limit goes away in 2010) you may not separate the pre-Tax
contributions from post tax. If you could do so, you can (and should)
convert only post tax deposits, and therefore pay no tax upon
conversion. The proportion of pretax money will only be bumped higher by
rolling the 401(k) now. I may actually go the other way, transferring
all my pretax IRA money to my 401(k), then convert remaining (post tax)
money from IRA to Roth IRA. The cost and hassle will be worth the effort
in the end.

Joe
www.blog.joetaxpayer.com

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On Apr 19, 11:10*am, Mark Bole <ma...[at]pacbell.net> wrote:
- quote -

Of course, if you terminate employment in or after the year in which
you attain age 55 but before you reach 59-1/2, you also lose something
by rolling your 401(k) to an IRA.

Dave

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kastnna wrote:
[...]
- quote -

Everything except your last statement sounds about right to me. Some
ten or fifteen years ago, a Fortune 500 company I worked for decided to
move 401k custodianship from State Street Bank to Fidelity. There was a
lockout period as you describe, but we did not have a choice to take a
distribution. Of course, we could have converted all investments to
cash-equivalents prior to the switch, but we had no choice about losing
specific investment choices available under the former custodian, and
absent any action on the part of employees, specific funds were
automatically mapped to similar funds under the new plan. (To the best
of my recollection -- I no longer have the detailed paperwork).

I can also easily believe that rules for publicly vs. privately held
companies are different.

This is one of the drawbacks of leaving money in a 401k with a former
employer. Rolling over to an IRA removes these restrictions, plus
enables better tax treatment of pre-retirement withdrawals for
first-home purchase, education, and a few others.

This is also one of the reasons why employer-matching contributions in a
401k should not be considered as constructively-received compensation --
you don't really have full control over it until you leave the company
(or reach retirement age).

-Mark Bole

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"kastnna" <kastnna[at]auburnalum.org> wrote
- quote -

Are you referring to the Sarbanes-Oxley Act? If so, in
general, it requires that at least 30 days notice to
participants yada prior to any blackout period, where
"blackout period" is defined to be a suspension of usual
privileges yada for a period of more than three business
days.


Also, I believe this law applies only to public companies
(namely, those held by shareholders etc.). Private companies
are encouraged to comply with this law, but I do not think
they currently are required to do so.

- quote -

Depends on the meaning of "transfer."

- quote -

I believe what it boils down to is the companies have to be
reasonable. They can't go exchanging one's specific stock or
mutual fund positions willy-nilly, for example. If they do,
and the employees can show harm, there most certainly may be
a case. The 1999 lawsuit between Signet employees and their
subsequent employer, First Union. is worth googling, since
it was settled in favor of the employees about 2001.

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On Apr 17, 10:25*pm, Sandra Loosemore <nore...[at]frogsonice.com> wrote:

- quote -

Sandra hit on something that sounded fishy to me also. When changing
qualified plans (new company or not) the IRS requires a blackout
period of not less than 30 days. During this time, no changes can be
made to the accounts (you don't want a bunch of action occurring in
the accounts at the same time they are changing custodians). Plan
participants must be notified in wiriting before said period and are
often allowed to request a distribution at that time.

Contrary to some of the statements here, an employer cannot transfer
your assets independent of your wishes. When you enrolled in the 401k
you enrolled with a specific provider, under a specific set of T&Cs,
and with a specific set of investments. That can't typically be
changed without your approval. Furthermore, the IRS is very adamant
that 401k plans are not assets of a company and therefore should not
have been included in the company merger. By definition the assets are
the employees, held IN TRUST by the company, and custodied by an
investment company FOR THE BENEFIT OF the employee. Lastly, it is
uncommon that the purchasing company would include the 401k assets in
negotiations. There is little they can do to prevent immediately
losing the assets they "negotiated" for (through employee attrition)
and they also can't report the 401k on their books (held in trust
separate from the company).

I suspect the situation was poorly explained to you or you are being
manipulated by management. The purchasing company almost assuredly
wants the 401k assets as it likely reduces their overall expenses and
pads the plan providers' pockets. Perhaps the outgoing management is
"fibbing" to get in the good graces of the acquisition company.

Keep asking them questions, seek a lawyer if necessary, consult the
DOL website for additional help.

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There isn't too much detail here, but the plan administrators have a
lot of freedom, perhaps even to do they did to your investments.

I wonder if then you could roll it oven an IRA of tour own. Could
this forum answer this question, please?

TIA

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"Sara Brown" <SaraTGinMD[at]aol.com> wrote
- quote -

What part sounds illegal? Yes,they told you one thing and
then did another. But it's not clear you were harmed. Harm
is one of the first requirements for a civil lawsuit. Also,
the requirements for a legal contract have not been met.

I think what you are experiencing here, perhaps for the
first time, is the one major drawback of a 401(k). Namely,
the employer gets to call a lot of the shots on them.

It is true you can quit. Then one option you will have is
rolling over the 401(k) to a Traditional IRA. Also, are you
near retirement age? Then your options for the 401(k)
increase too.

It's possible the new company will have better choices in
its 401(k), too.

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Sara Brown <SaraTGinMD[at]aol.com> writes:

- quote -

I don't think your 401K was "sold" to the new company. That's your
money, not your employer's to sell. However, it's possible that the
new company has taken over as custodian of your old 401K plan, or the
plan was merged into that of the new company. None of us on the net
can tell you exactly what is going on; you need to get something in
writing from your employer, or call the account services folks at your
old plan and see if they have any details yet.

Some years back when the company I worked for was acquired by a much
larger one, our old 401K plan was closed. We were given 90 days or
something like that to tell them what to do with our money; I chose to
roll mine over into the new company's 401K plan, which was actually a
much better plan than we had before (better investment choices), but
that wasn't automatic -- I had to fill out some paperwork to make it
happen. Beware that "cashing out" is a dumb idea anyway since you
have to pay penalties as well as taxes. I also suggest you make sure
you're enrolled in the new company's 401K plan now -- this is probably
not automatic either.

-Sandra the cynic

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"Sara Brown" <SaraTGinMD[at]aol.com> wrote in message
news:9062a2bd-fe1e-4853-aa84-3267d33200e0[at]t54g2000hsg.googlegroups.com...

- quote -

What do you know about the new 401k that leads you to believe you wouldn't
want your funds transferred and to continue to contribute to it?

Elizabeth Richardson

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Sara Brown wrote:
- quote -

Are you an employee of the new company? If so, I suspect that no, you
do not have any recourse short of quitting. In that case, they do have
to give you your money.

-Mark Bole

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On Apr 17, 3:06*pm, Sara Brown <SaraTGi...[at]aol.com> wrote:
- quote -

Nothing conveyed orally is legally binding, unless you are
majority stockholder (or in class that comprises a majority)
and you can demonstrate in a court of law that your vote
on the sale depended on such oral assurances. (Not
likely!)


- quote -

So what would you have done differently -- that you cannot
do now -- if they had told you from the get-go that the
401(k) would go to the new company?


- quote -

This sounds like a legal question, not a financial planning
question. You should post your inquiry to
misc.legal.moderated. But I'm sure I can tell what the
responses will be: (a) the devil is the details, which your
posting here is sorely lacking; and (b) if it really matters
to you financially, don't rely on the anonymous/unreliable
newsgroup for advice. Run, don't walk, to a labor attorney
who can tell you what your rights are.

Of course, the "simple" answer is: quit! Then you can
do whatever you want with the 401(k).

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My company was recently sold and we were assured (Verbally) that we
would have the option of either cashing out our 401K accounts or
rolling them over into the new company..But now they are saying they
have sold our 401K to the new company..I didn`t want this at all..They
are saying there`s nothing we can do as it was in the contract for the
sale of the company that the 401K was part of the sale..This doesn`t
sound legal to me..Do I have ANY recourse?...Thank you

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