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Question
My husband was recently laid off. He has a pention fund through PBGC. We received a letter yesterday stating that we could take a lump sum benefit of his pension. This id due to his being laid off according to his employer. Now, my question is this, if we send this form in and within the period of time it takes for them to process it he gets called back to work, will they still honor it? He is suppossed to be going back within a few weeks but we really need the money. We want to wait as long as we can to send it back because he is on unemployement now and I know once we receive the check, he'll not qualify anymore.
It would depend on the company, I am guessing that he would not be eligible for the payout if he returns to work.
It sometimes takes 30 days or longer to process a withdrawal distribution from a 401K plan.
You need to know that you will have to pay taxes on the amount of the withdrawal and because it is an early withdrawal an early withdrawal penalty.
Shirley
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Answers by Expert:
Shirley McAllister, CPP, PHR
Expertise
I can answer payroll questions, payroll tax questions, 401K questions. No stock option questions please and I have some knowledge of other pensions but am most familiar with the 401K pension. I can answer U.S.and Canada payroll questions proficiently and have a good general knowledge of UK and South Africa and some knowledge of Australia and New Zealand Payroll procedures. Please do not ask me homework questions I do not have time to answer them.
Experience
25 years with an international company in the Human Resources, Payroll and Payroll Tax areas.
Organizations
SHRM, APA, I.O.M.A.
Publications
I.O.M.A. and BNA
Education/Credentials
P.H.R., C.P.P., Canadian Payroll Administrator, Successfully passed APA class on UK Payroll Administration.
Boise State University Human Resource Certification
Awards and Honors
APA Hotline Citation of Merit for last 8 years.
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