Help.I was laid off in January and had to cash in my 401k and company sponsored retirement plan.No problem?
Wednesday, June 24th, 2009 at
8:02 am
Roberta K asked:
with my 401k payment but Vanguard just called me and told me I could not cash out my retirement. They sent me all the froms in January and waited 2 months to tell me they messed up.What can I do?Can legal action be taken?I really need that money. Thxs
Vanguard told me the company they and the company were wrong but the company claims Vanguard was wrong. They both said I would have to wait till 55 years and it took them 2 months to tell me after they already sent out the forms and told me I could get it
with my 401k payment but Vanguard just called me and told me I could not cash out my retirement. They sent me all the froms in January and waited 2 months to tell me they messed up.What can I do?Can legal action be taken?I really need that money. Thxs
Vanguard told me the company they and the company were wrong but the company claims Vanguard was wrong. They both said I would have to wait till 55 years and it took them 2 months to tell me after they already sent out the forms and told me I could get it
Tagged with: 401k Plan • Company Claims • Froms
Filed under: Retirement
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Roll it over to Fidelity or something.
I would contact an attorney for advice …. go from there.
National Labor Relations Board call them and file complaint
1-866-667-NLRB (1-866-667-6572)
or
(TTY) 1-866-315-NLRB (1-866-315-6572) for hearing impaired if you were laid off then you can make them pay you unemployment benefits just go and sign up for them to
Was it vested money? You could be allowed to roll it into an IRA or cash it out. They will only withhold 20% so you will need to file estimated taxes to pay the rest of the taxes and penalties and any state taxes and penalities.
They’re only looking out for your best interest. Why do you want to cash it in? You will end up losing half of it to taxes. That’s stupid. Find another job.
If they are saying there was a clerical error ( no big surprise to me ) you should consult legal advise to get your money. You can also contact the Attorney General’s Office in your state and file a complaint against Vanguard. This is the route that I would take instead of legal representation. Legal representation will take 1/3 of your money. You said you were already having a financial crisis so there’s no chance I would give what money I did have to a lawyer.
What you can do is this…..If Vanguard really did make a mistake and you are owed your 401k. You can sue Vanguard and ask for your legal expenses to be paid by Vanguard. But make sure there was an error on their part and not yours.
Hope this helps and Good Luck.
What was the reason that they gave when they told you that you couldn’t cash out the retirement. Whether they messed up/delayed anything is not as important as the reason you supposedly can’t do it. That’s the most critical part of the whole post. Without that information I can’t tell you whether you have any recourse or not.
–edit
It’s very possible that there are no early distribution provisions even upon termination of employment. However, those type provisions are FEW and FAR in between. Ask your employer for a copy of the Summary Plan Description. In there look for distribution options or distribution timing. That will tell you what you need to know. If it’s in there that no distributions will be paid prior to age 55 then you are out of luck. Thank Vanguard for paying attention to the rules as they could have messed the plan up for paying you out early. If it’s not in there then have your ex-employer ask them to review the plan document again and provide a clear cite for their position. This will take time and there is no quick resolution and unfortunately no legal recourse for you no matter which way it turns out. They aren’t doing anything wrong, just being slow and providing a different interpretation of the document than what you or your employer believes correct.
One thing to remmember is that the 401k was paid out correctly and this is the retirement plan money..completely different and the rules are 100% different.