I left my job in March of 2008. HR says 401K money isnt ready for distribution til end of 09...is this legal?

Our HR lady had no training and doesn't know anything about insurance, HR laws, etc...so I can't help but think she doesn't know what she's talking about when it comes to this either. I left my job in March of 08 and she's telling me that I can't have my 401K money until possibly the end of this year. A lot of people are telling me that's wrong and they can't legally hold it from me. I need to know if that's true and where do I go from here.
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Yeah, wonderful Morgan Stanley...no one will return my calls.

digdowndeepnseattle

shane is incorrect. There are plans that do not allow for distributions until after the end of the plan year (and a reasonable period for allocation reconciliation). This is because the plan may owe you an additional contribution and they don't want to have to process 2 distributions for you. Also, your industry may have been one where people were prone to leave employment simply to get at the 401k money and then reapply for their jobs later....That's an expense that employers quickly tired of and extended out the distribution dates. Not saying that your HR lady is correct because I don't know the rules of YOUR specific plan...just saying it's possible that she's right.

What you need to do is look at your Summary Plan Description (commonly called the SPD). This will spell out EXACTLY when distributions are paid. If it says as soon as administratively possible after seperation from employment then you have a case. If it says as soon as administratively possible after the final allocation is done for the plan year (or something of the like) then your HR lady got one right.

If you don't have a copy then ask the HR lady for one. She may charge you a nominal amount (no more than 25cents a page) but you can get a new copy.

Shane

Your situation falls under ERISA laws. You are right. You HR person doesn't know a damn thing although I have a gut feeling she has been given the directive to say this. By law you should have been sent the forms to either withdraw your 401K monies or roll them over within 30 days of resignation and/or termination. Contact the Department of Labor who oversees the adherence to this law at 1-866-4-USA-DOL (1-866-487-2365)

HEATHER

Call the company that manages the 401k directly and ask them.

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