AboutAllen Expertise Pension questions ONLY. Pension, profit sharing, and 401(k) plan design, installation, administration and actuarial services; rollovers to Individual Retirement Accounts; taxation of retirement plan distributions
Experience Over 35years experience in the pension field
Organizations Various actuarial organizations
Education/Credentials MBA and various professional certifications
Question If I was terminated without cause what happens to the unvested funds in my employer 401K plan? Also I sent a request to my old company to rollover my 401K into a new IRA rollover account and supplied then the bank info and account number for the funds to be sent there. They instead cut a check and sent it to me with a disclaimer stating that by cashing or depositing it I agree to all terms of the distribution, I don’t know if it is correct or not. Am I ok with the Feds if I deposit the check into the new IRA account myself?
Answer The money that is not vested is forfeited and reallocated to the other participants in the plan.
As far as the check goes, I wouldn't cash it. The plan administrator should have given you choices on how the money was to be paid. In addition, if they sent a check to you, they should have withheld 20% for federal income tax and possibly an additional amount for state income tax. I would return the check with a copy of your original request. If you continue to have problems, contact the local office of the U.S. Dept. of Labor - Employee Benefits Security Administration. They should be able to help you.
