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Tax Information With A Mother's Touch Published by Eva Rosenberg, MBA, EA Volume 5, Issue 209 May 9, 2002 |
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» From: Alameda, CA Dear TaxMama: I requested a 401k disbursement from my former company three months ago. They still haven't provided me with any paperwork and are now directing me to their third-party administrator. Isn't there a legal limit (of three months, for example) on such requests? Is there something I can do to encourage them to get this done? Thanks in advance for your advice. Regards, Hillary ![]() Well Hilary, You should have contacted the administrator in the first place. They’re the ones who issue checks on the account. But, of course, who knew, right? There is a 90-day limit for the plan administrator to let you know if you do or don’t qualify for benefits. It's not an IRS/tax issue. It's an ERISA issue. This area of the law is overseen by the Department of Labor. Their website has an article entitled: Making A Benefits Claim And Filing Suit Under ERISA However, without extensive searching, I can’t find the specifics of how long they can hold your money without releasing it to you, if you simply want a full distribution from your account. But, the specifics should be in your plan document. If you don’t have a copy, ask for a copy of the plan document and read it. It will tell you the plan's rules. When I left my last job, my employer did the same thing to me. And back then, there was no time limit. So, there was nothing I could do. Now, I know there's a limit. But it's not easy to find - without already knowing where to look. (Not really helpful for the public, is it?) Oh, one little trick that might help in the future. If you just ask for a partial distribution (say, 90% of the money in the account), instead of closing out the account, you should get that money in a couple of weeks. Closing the account takes longer because there’s more paperwork involved. Best wishes, Eva Rosenberg Your TaxMama |
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| Library of Congress - ISSN 1532-0790 Copyright © 2000-2009 - Eva Rosenberg |
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