Company being bought out, forced to roll 401k to new companies plan | TigerDroppings.com

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LSU0358
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Member since Jan 2005
5357 posts

Company being bought out, forced to roll 401k to new companies plan



The company I work for is being bought out. We have just been told that we won't be able to roll our 401k over to an IRA, but will have to roll it into the new companies 401k plan.

Is this correct/legal. The new company's plan is horrible to say the least.

ETA: They company doing the buying bought 100% of our companies stock. However, we are not remaining employees of the old company, and are completing paper work to become employees of the new company.



This post was edited on 3/21 at 4:10 pm



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Broke
LSU Fan
AKA Buttercup
Member since Sep 2006
57257 posts

re: Company being bought out, forced to roll 401k to new companies plan


quote:

The company I work for is being bought out. We have just been told that we won't be able to roll our 401k over to an IRA, but will have to roll it into the new companies 401k plan.


I don't think they can do that. You can do whatever you want after the blackout period.






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LSU0358
LSU Fan
Member since Jan 2005
5357 posts

re: Company being bought out, forced to roll 401k to new companies plan


I don't think they can do that either. I think our accountant (aka the bosses wife) doesn't know what the hell she's talking about.





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SG_Geaux
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Member since Aug 2004
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re: Company being bought out, forced to roll 401k to new companies plan


quote:

We have just been told that we won't be able to roll our 401k over to an IRA, but will have to roll it into the new companies 401k plan.


Sounds like bull shite to me






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LSUDad
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Still on the move
Member since May 2004
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re: Company being bought out, forced to roll 401k to new companies plan


I think you would be able to do a rollover. Did the company contribute (A %) any to this account?





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adavis
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Member since Aug 2007
3442 posts

re: Company being bought out, forced to roll 401k to new companies plan


quote:

Sounds like bull shite to me


It is. Don't let them tell you what to do with your money. You've always got the option to move your IRA. Of course, you're not going to get those matching funds $$$$'s, but it's YOUR money. You can put it wherever you want.






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LSUDad
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re: Company being bought out, forced to roll 401k to new companies plan


quote:

Of course, you're not going to get those matching funds $$$$'s,


Unless vested.






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agdoctor
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Louisiana
Member since Dec 2004
1881 posts

re: Company being bought out, forced to roll 401k to new companies plan


been involved in 2 buyouts. Both rolled the 401k into the new companies plan. No questions asked.No option.





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LSUDad
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Still on the move
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re: Company being bought out, forced to roll 401k to new companies plan


What type of job?





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LSU0358
LSU Fan
Member since Jan 2005
5357 posts

re: Company being bought out, forced to roll 401k to new companies plan


quote:

Both rolled the 401k into the new companies plan. No questions asked.No option.


That looks like is what is going to happen. The new company's 401k options suck horribly. I've been able to make killing in precious metal funds and now my choices are limited to small cap, mid cap, large cap, and Fidelity Freedom funds. I want to vomit.






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LSUDad
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Still on the move
Member since May 2004
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re: Company being bought out, forced to roll 401k to new companies plan


quote:

Both rolled the 401k into the new companies plan. No questions asked.No option.



That looks like is what is going to happen.


So you can't get the money till you retire, quit or die?






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agdoctor
LSU Fan
Louisiana
Member since Dec 2004
1881 posts

re: Company being bought out, forced to roll 401k to new companies plan


quote:

So you can't get the money till you retire, quit or die?


Thats correct. If I leave I can roll it over into an IRA or just leave it. Most plans have limited options. I use the ones at work then fill in the gaps until I hit the caps with Roth IRA's. Lastly I use tax managed funds in taxable accounts.I use Vanguards website to have everything in one place to monitor it.Works well for me.






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Maderan
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Member since Feb 2005
495 posts

re: Company being bought out, forced to roll 401k to new companies plan


It is a plan merger. You will not have the option to roll into an IRA. There is no qualifying event that lets you do a rollover as you will transfer over your vesting and should be credited with years of service at your past employer.

You may want to check the specifics of the new plan. Some plans allow for in-service distributions (or rollovers) on elective deferrals and rollover contribution at any age. If you have any pull at the new company you request that the plan be amended to allow this to happen. The fee for amendment varies depending on the provider and TPA. Between $65 and $650 (if a crappy company).







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The ATL
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Atlanta
Member since Jul 2010
825 posts

re: Company being bought out, forced to roll 401k to new companies plan


correct. no choice in the matter unless you quit or the company allows in service withdrawals (usually for larger companies but still uncommon.)

If you leave, then get it out of a plan and roll it over to an IRA. 401K investment options particularly from Fidelity are poor at best with very limited options and many on index funds which are not the greatest.






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LSU0358
LSU Fan
Member since Jan 2005
5357 posts

re: Company being bought out, forced to roll 401k to new companies plan


Just an FYI for anyone who cares...

I might be able to roll into an IRA afterall. Our buyout was a little odd. The company doing the buyout bought all of the company stock, so the old company still exists. However, we are being made to fill out paperwork to become employees of the new company. So technically each employee is changing companies for a job. The company that bought us out has there legal group looking deeper into it, but that was there initial answer.






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SanFranTiger
LSU Fan
San Francisco, CA
Member since Sep 2003
3532 posts

re: Company being bought out, forced to roll 401k to new companies plan


Microsoft acquired a company I worked for in the same exact manner in which your company is being bought.

Our 401 was rolled over into the MSFT plan. No choice in the matter.






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