Legal Question in Business Law in New York

Re: 401k Withdrawl

From time to time, the federal government cracks down on companies that mishandle pension money collected from their employees. In fact, during his term as Labor secretary, Robert Reich said:

"It is illegal for an employer to delay transfer of funds from an employee to their 401K (retirement) plan. It is your money, not their free checking account."

The question, then, is what is the source of this illegality. Your employer or the plan administrator for the 401(k) plan should have provided you with a copy of the 401(k) plan's summary plan description (SPD). If you can't find your copy, contact your employer and ask for a replacement copy. The Dept of Labor could also supply a copy. The SPD is required to include an explanation--in non-technical terms-- of the plan provisions, such as your benefits and rights under the plan, including when you are eligible to receive distributions. Alternatively, you may ask your employer to provide an explanation for refusing to honor your request; in fact, you must be given an explanation in writing. It sounds as if your employer is not giving you a reasonable or legitimate explanation. In all events, you will have to begin with a clear understanding of the terms of your plan when asserting your right to withdraw funds, and the employer and fund manager will be charged with complying with those terms. See generally Clark v. Lindquist, 683 N.W.2d 784, 785 (Minn. 2004) (stating that the qualified individual retirement annuity (�IRA�) �allowed Clark to withdraw funds at any time, up to the full principal amount of the annuity, less a surrender charge, which began at 6 percent and declined as the funds were left invested for several years. The IRA was also subject to applicable tax penalties for removing funds prior to age 59 1/2").

Re: 401k Withdrawl

Sounds very fishy. Consult with local Better Business Bureau.