Why is my employer delayed 401(K) distribution?


Your employer or plan administrator of 401(K) plan must provide you with a copy of the 401(K) with a brief plan description (SPD).

(See. what information does the employer have to give me regarding my 401(K) plan?)

If You can’t find your copy, contact your employer and ask for a replacement. A copy of the plan SPD can also be obtained from the Department of labor (dol), Department of labor, EBSA, disclosure room, Room N-1513, 200 Constitution Avenue, N.W., Washington, D. C. 20210. (They may charge reproduction fees, which are usually a very small amount.)

The SPD must include an explanation – in technical terms – the provisions of the plan, such as your benefits and rights under the plan, including when you have the right to receive distributions.

In addition, you can ask your employer to provide an explanation for refusing to comply with your request; in fact, you must provide an explanation in writing. A legitimate explanation for delays in the distributions will include the following:

  • You still have no right. For example, the plan may require that participants reach a certain age before they are considered eligible for distribution. This requirement should not, even if You no longer work for the company.
  • The plan may make payments only at a certain frequency, e.g., quarterly. So, if you have requested a distribution in mid-January, you may have to wait until March 31 before you receive the requested amount.

If you believe that your employer is not fulfilling the terms of the plan, you may contact the Dol toll free at 1-866-444-3272 and ask to speak with a regional representative near you, or you can contact your regional office.

This question was answered by Denise Appleby
(Contact Denise)

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