Question:

WEIRD:I quit a job in May, then in July I get a letter saying that company had opened up a IRA account for me?

by  |  earlier

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and that I had $1,092 dollars in it.

I said I wanted to withdraw it, and they said they will send me the forms to do it.

That was NOT expected as I had already withdrawn all of my 401K I had with them. ( About $2,000 )

Is this normal? Or did I just get lucky? Or why did that company do that?

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2 ANSWERS


  1. The company is obligated by law, to inform you of any funds you may  have in a pension fund at the time of discharge or voluntary  quits. When a pension fund is in effect, all employees are eligible after the time has elapsed where they were not eligible, and must be covered. This is what apparently happened in your case.


  2. You will get the best answer by asking the person at your company who is responsible for the 401(k) plan, usually someone in HR or in the benefits section of HR if you worked for a large company.  You could also re-read the letter that you received more carefully.  

    But what this sounds like to me is that there was some delay in depositing funds in your account (perhaps the company match?), which resulted in a small balance after you had withdrawn what you thought was your total account.  This small balance was distributed without your consent and rolled over into an IRA, as the law allows.  If it were under $1,000 they could have done a taxable distribution, with income taxes withheld, but over $1,000 required an IRA rollover account.

    Please check and let me know if I guessed correctly.  I like solving mysteries...

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