Expert: Allen - 10/16/2007

Question
I left 180K in my 401k when I left my job in late 2006. I started requesting paperwork in January to rollover into another plan but they just now sent me the forms. If I rollover now, they say the amount owed to me is the fund value as of 12/31/06 so I lose the last 10 months of appreciation. Is there any way around this? I'm afraid if I wait for January 2008 to file forms, they'll refouse to pay me til late in 2008.

Answer
What they are telling you may be correct. Some plans are what is known as trustee directed. This means all investments are in one account and the trustee decides how the money is invested. The work for any year is done in the following year and the earnings are allocated to the participants when the work is completed. Sometimes this work is not completed until late in the year and therefore the paperwork for distributions based on account values on 12/31/06 can not be processed until October 2007. If this is the case, they may be doing everything correctly. The same may be true if you ask for a distribution in 1/08 based on 12/31/07 values. However, if you feel the company is not doing things properly, you can contact the local office of the U.S. Dept. of Labor - Employee Benefits & Security Administration and they may investigate.

Also if the investments are participant directed (you choose how your account is invested), they will pay you based on the current value of your accounts so you will receive the earnings for the first 9 or 10 months in 2007.. They just may not have been able to process until all the work for 2006 was completed.