My former employer won't release my 401k funds to me...what do I do???

Question

My employment was terminated 30 days ago from a former employer. According to the plan administration company for my 401k plan, the SOLE person responsible for the processing of paperwork to release my 401k funds to me is my former boss. I had to ask her to send me the forms, which she did. I sent them back to her certified mail, and she received them over a week ago. Just yesterday, I called ING to see if they had received the paperwork to disperse my funds to me, and they had not. At this point, it is simply a matter of her signing them and faxing them to ING for processing. There isn't much money in there, but it is money that I am desperately needing at this point in time.

This is a spiteful woman who is playing games. I emailed her yesterday and nicely asked her to fax them the paperwork, and her response was that she'd "try to get to it eventually." She has no intentions of sending this paperwork to them in a timely manner.

Who can I contact for help besides ING?

Answer 1

Generally, the law requires plans to pay retirement benefits no later than the time a participant reaches normal retirement age. But, many plans, including 401(k) plans, provide for earlier payments under certain circumstances. For example, a plan's rules may provide that participants in a 401(k) plan would receive payment of his or her benefits after terminating employment. The plan's SPD or Summary Plan Description should set forth the plan’s rules for obtaining the distribution as well as the timing of distribution after termination of employment.

If your SPD states that benefits are payable as soon as administratively possible after termination of employment then send one more certified letter asking that the paperwork be signed and sent on to ING.  You should also state that if this is not done in a timely manner then you will be forced to contact the US Department of Labor to intercede on your behalf.  Let them know that you will be contacting ING in 5 days and hope that they will have received the forms by then.   I'd cc the lady's boss (or the owner of the company) to make sure that he/she is aware of the situation and to put pressure on her.  

Here is the DOL contact webpage...

Do not contact a lawyer or threaten a suit....that would be a) too expensive for you and b) there are no punitive damage options available...ie you'd be paying the lawyer and not recouping any costs.  The only thing that can happen in this situation is that they can be fined by the DOL and you can achieve that for free by calling the DOL directly.  Though more likely the DOL would just call them and "politely" explain the rules to them and your distribution would be faxed.  But you don't want to do that until you exhaust reasonable resources yourself or you'll risk the DOL's ire yourself.

Answer 2

If you 401K is not vested, the employer can remove their contributions.  They cannot remove any of the interest and they cannot touch your contributions under any circumstances.

When you withdraw the funds from the account they are subject to a 10% penalty and current income taxes must be paid.  ING is required by law to give you a form showing (1099-something or other) an itemization of all withholdings, and at the end of this year you can file file this with your taxes.

Additionally, you own that money and there are federal laws that govern it.  Any refusal on the part of the employer or ING to pay your funds is considered a serious violation.  

You can contact your state wage and hour board and the Securities exchange (federal) for more help.  If you are a minority you can also consider action against the employer through the EEOC.

helpful links are :   http://www.eeoc.gov   http://www.sec.gov, and you can also go to http://www.ask.com and use the search bar for your stae labor relations links.

Hope this helps.

Answer 3

A lawyer

Answer 4

Ask a legal advisor. That is YOUR money and you are entitled to it since it came solely from your salary which you worked for. If your former boss refuses to release the forms and fax them over....you are entitled to a lawsuit against the company.

Answer 5

Why are you cashing it out?  That is a HORRIBLE idea.  You will pay a penalty and taxes.

Roll it over into an IRA.

If you are desperate for money (and there is not much in there) then get a second job for a few weeks to make ends meet.

NEVER cash out a retirement account before retirement (unless it is a matter of eviction or medical emergency).

In my opinion.

Answer 6

yeah most employers are spiteful but they have up to 90 days to release the funds and i bet they will wait to the last minute nothing you can really done except call them everyday and hassle them they might give up just so you stop calling

Answer 7

take them to court

Answer 8

I think it's unreasonable to demand that this is done within a week. Be patient. Once your employer sends in the forms (this verifies that you have been terminated) there will be  a further delay while the plan administrator gets you the money.

I think you are also being foolish by raiding your 401(k) and paying penalties. What are you going to retire on? You should roll your 401(k) over into an IRA.

Answer 9

Get on the horn with ING tomorrow--you are their client, not your boss' (in the case of your 401K---you should be able to get ING to pressure your old boss---you should have an invidid. representative with ING, ask them if there is an alt. to going around your boss. If it is a corp. you worked for, go to HR, if it is a small bus, tell the boss/****** that you will go to the Atty Gen office of your state if it is not rectified by friday (stay firm) tell her that is money your put aside-also pressure ING to get it, that is their job! That steams me! I hate it when women bosses get an ego complex! Grrr! good luck! Atty General's office (at least in IL, where I am from) considers this a consumer issue. Go for it!

edit: Rick is absolutely right! roll it over--but you need the funds (or at least the paperwork) first! I don't think it is unreasonable at all, Lisa, to release the paperwork immediately. I have never heard of 90 days, but i would think it would be beneficial to the HR dept. to close the file, right?

edit 2: I am steaming now! if your were terminated, go to unemployment (and get cobra for you and your child, that is the least the old company can do for you). Also, it cost nothing to contact the AG's office! good luck--also---for quick cash and insurance, Starbuck's give's their PT workers Full benenfits (i think immediately), so you may want to check them out (or, perhaps a child friendly, welcome job where you could bring your child to work (ie, child care provider, camp assist, things like that!) it will work out! good luck!

Answer 10

The company's legal or hr department.  They can tell her how much trouble she is going to be bringing down on the company.

Otherwise you'll need a lawyer and that could wipe out the money you are trying to get.  Try to locate free legal aid in your city.  Possibly a letter from them may help nudge her.

Answer 11

Call the Federal trade commission and make a formal complaint and they will advise the next step. This is Free