Author Topic: Denied 401k Rollover?  (Read 11426 times)

Can't Wait

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Denied 401k Rollover?
« on: February 18, 2014, 11:13:23 AM »
I have a 401k account with Wells Fargo from a previous employer that I'm trying to roll over to my current employers 401k plan however, Wells Fargo states that I'm still listed as a "Current Employee" of the previous company even though I stopped working for the previous employer back in 2012. Anyhow, Wells Fargo won't let me do a rollover until my employment status is changed.

I called the plan manager of the Wells Fargo account and complied with what they wanted me to do to change my employment status (about a month ago). The plan manager told me it would only take a few days to update the status but as mentioned, it has been about a month now and according to Wells Fargo, I'm still a current employee. I now can't get the plan manager to return my calls to follow up.

I've explained to Wells Fargo that I haven't  worked for this company for almost 2 years and that I just want to roll my money over but they are refusing to allow me to do that. Has anyone had any experience with something like this? Does Wells Fargo even have the right to deny me a distribution simply because of an employment status? I also explained to Wells Fargo that I can't make the plan manager change my status and that it doesn't seem right that they are denying me the rollover over something I have no control over.

Any advice would be appreciated. Perhaps I should seek legal counsel?

Cheddar Stacker

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Re: Denied 401k Rollover?
« Reply #1 on: February 18, 2014, 11:15:54 AM »
Call your old employer and ask them to either send you a paycheck for 2 years of back pay, or fix this issue immediately. That should do the trick.

Can't Wait

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Re: Denied 401k Rollover?
« Reply #2 on: February 18, 2014, 11:19:36 AM »
Call your old employer and ask them to either send you a paycheck for 2 years of back pay, or fix this issue immediately. That should do the trick.

The old employer is different from the plan manager and old employer no longer exists. They were a defense contrator and when they lost the contract they went under.

rocksinmyhead

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Re: Denied 401k Rollover?
« Reply #3 on: February 18, 2014, 11:21:10 AM »
Call your old employer and ask them to either send you a paycheck for 2 years of back pay, or fix this issue immediately. That should do the trick.

The old employer is different from the plan manager and old employer no longer exists. They were a defense contrator and when they lost the contract they went under.

did you explain that part to WF? like, not only are YOU no longer a current employee, the employer actually has NO current employees? :)

Can't Wait

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Re: Denied 401k Rollover?
« Reply #4 on: February 18, 2014, 11:27:56 AM »
Call your old employer and ask them to either send you a paycheck for 2 years of back pay, or fix this issue immediately. That should do the trick.

The old employer is different from the plan manager and old employer no longer exists. They were a defense contrator and when they lost the contract they went under.

did you explain that part to WF? like, not only are YOU no longer a current employee, the employer actually has NO current employees? :)

I sure did. I even escalated it to a manager. They say that they are following the policy of the plan manager and there is nothing that they can do until my employment status is changed. It's really bizarre to me that Wells Fargo would take this stance. I explained to them until I was blue in the face that I no longer work there, I can prove who I am however they want, and that I just want MY money. I'm not sure where to go from here. I'm tempted to contact a lawyer.

Another Reader

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Re: Denied 401k Rollover?
« Reply #5 on: February 18, 2014, 11:37:30 AM »
Is the former employer in bankruptcy?  Getting an entity in bankruptcy to do anything is difficult.  The bankruptcy court often has to act.  If the company is under bankruptcy protection, the court may be using estate assets to pay the plan administration fee until the case is resolved.  If the company had notified WF that it was shutting down outside of bankruptcy and would no longer pay the plan administration fee, WF should be aware of that and someone should have contacted the plan participants.

You won't be able to get the money from Wells Fargo without the cooperation of the employer or the party representing the employer.  Wells Fargo will have to have verification of termination of employment from someone representing the employer to meet their fiduciary responsibility.

If the company is in bankruptcy, call the bankruptcy trustee's office to see if there is a process to get your 401k money released.


Can't Wait

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Re: Denied 401k Rollover?
« Reply #6 on: February 18, 2014, 11:47:14 AM »
Is the former employer in bankruptcy?  Getting an entity in bankruptcy to do anything is difficult.  The bankruptcy court often has to act.  If the company is under bankruptcy protection, the court may be using estate assets to pay the plan administration fee until the case is resolved.  If the company had notified WF that it was shutting down outside of bankruptcy and would no longer pay the plan administration fee, WF should be aware of that and someone should have contacted the plan participants.

You won't be able to get the money from Wells Fargo without the cooperation of the employer or the party representing the employer.  Wells Fargo will have to have verification of termination of employment from someone representing the employer to meet their fiduciary responsibility.

If the company is in bankruptcy, call the bankruptcy trustee's office to see if there is a process to get your 401k money released.

I really have no idea if they are in bankruptcy or not but I would imagine so. I guess I'll have to do some more digging. I just can't imagine a financial institution such as Wells Fargo denying an account holder their OWN money. I can't make the plan administrator do anything nor can I contact the previous employer. Just doesn't seem legal to me. I mean, what does an employement status have to do with anything? I can prove I am who I say I am, they can look at the account and see that nothing has been contributed to it since I left the employer. This is very frustrating.

Another Reader

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Re: Denied 401k Rollover?
« Reply #7 on: February 18, 2014, 12:22:15 PM »
If you are still employed, you cannot roll the account over unless there is an in-service provision to do so.  Until WF is otherwise notified by the employer or the employer's representative, you are considered employed.  Their responsibility is to their client, the company.

If an entity holding money in a trust for you, such as a property manager, goes bankrupt, the release of the funds to you can take years.  I know someone that waited over 2 years for security deposits to be released.  The bankruptcy court had to verify the deposits were in a proper trust account and not comingled with the estate assets.  Then they had to notify everyone with the slightest interest and hold a hearing.  All this for a couple of thousand dollars in this case. 

A 401k should be much easier to resolve, but it's not likely to be at the top of the trustee's "to do" list.  In your shoes, I would try to track down the company.  If it's in bankruptcy, call the trustee's office.  If it was in bankruptcy and the case has been discharged, it still might be worth a call to the trustee's office to see if they know whether there was an order issued for the 401k.  Otherwise, you can call Wells Fargo and ask what paperwork they need and from whom to get this resolved.

If all of this fails, you may want to consider consulting an attorney.

Can't Wait

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Re: Denied 401k Rollover?
« Reply #8 on: February 18, 2014, 12:48:38 PM »
I appreciate your advice and I'll see what I can do from here. I figured I could get a notorized affadavit stating that I am no longer employed by that company or something of that nature to resolve the issue. It's a shame that I'm probably going to have to get a lawyer all because of some mundane detail that means absolutely nothing in the grand scheme of things.

Thanks again for the help!

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Re: Denied 401k Rollover?
« Reply #9 on: February 18, 2014, 12:52:45 PM »
A notarized affidavit signed by you is of no help.  Only someone that represents the employer can fix this.  Follow the company through the dissolution process and you will find the answer.

CommonCents

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Re: Denied 401k Rollover?
« Reply #10 on: February 18, 2014, 02:30:54 PM »
Would they accept tax forms demonstrating you are no longer receiving a paycheck?

Can't Wait

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Re: Denied 401k Rollover?
« Reply #11 on: February 18, 2014, 04:23:10 PM »
Would they accept tax forms demonstrating you are no longer receiving a paycheck?

They didn't seem to care what I could show them to prove my identity or that I was no longer employed by the company. They kept stating that it has to come from the plan administrator.. It sucks that I am the one funding the account yet I don't have complete "control" over it so to speak.

CrochetStache

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Re: Denied 401k Rollover?
« Reply #12 on: February 18, 2014, 04:25:03 PM »
Any old co-workers you could contact? They may be having a similar issue and already be a few steps farther down the paths recommended in previous posts.

It may save yourself some time.

WF doesn't handle 401ks for free. They don't have a lot of reason to help when you are taking away their income.

TreeTired

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Re: Denied 401k Rollover?
« Reply #13 on: February 18, 2014, 04:39:06 PM »
Any old co-workers you could contact? They may be having a similar issue and already be a few steps farther down the paths recommended in previous posts.


More or less my thought.   Previous employer is bankrupt and gone.  Isn't there anyone else in your situation?   This is such an absurd case I would be threatening people with bodily harm... or at least my internet persona would be doing that.  I am a real tough guy online.   :)

Can't Wait

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Re: Denied 401k Rollover?
« Reply #14 on: February 18, 2014, 05:20:24 PM »
Any old co-workers you could contact? They may be having a similar issue and already be a few steps farther down the paths recommended in previous posts.


More or less my thought.   Previous employer is bankrupt and gone.  Isn't there anyone else in your situation?   This is such an absurd case I would be threatening people with bodily harm... or at least my internet persona would be doing that.  I am a real tough guy online.   :)

Not too many people at my previous job had the 401k plan. They would pay each employee about $500 a month for a health plan. If you didn't take the health plan, the money was placed into a 401k plan. Also, in order to get the 401k plan, you had to already have health insurance from another provider. There were three or four of us out of the 50 or so employees that already had health care so we ended up with the 401k.

Since the contract was ending and most of us were going to be unemployed, those that had 401k plans ended up cashing them out to stay afloat. I was fortunate in that I already had a govt job lined up so I didn't need to do anything like that and I just left the money in place. I should have just done the rollover to the govt TSP right when I started, I probably would have avoided this if I had done it back then. I only have myself to blame, I suppose.

fuzzhead1506

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Re: Denied 401k Rollover?
« Reply #15 on: February 19, 2014, 11:49:00 AM »
Any old co-workers you could contact? They may be having a similar issue and already be a few steps farther down the paths recommended in previous posts.


More or less my thought.   Previous employer is bankrupt and gone.  Isn't there anyone else in your situation?   This is such an absurd case I would be threatening people with bodily harm... or at least my internet persona would be doing that.  I am a real tough guy online.   :)

Not too many people at my previous job had the 401k plan. They would pay each employee about $500 a month for a health plan. If you didn't take the health plan, the money was placed into a 401k plan. Also, in order to get the 401k plan, you had to already have health insurance from another provider. There were three or four of us out of the 50 or so employees that already had health care so we ended up with the 401k.

Since the contract was ending and most of us were going to be unemployed, those that had 401k plans ended up cashing them out to stay afloat. I was fortunate in that I already had a govt job lined up so I didn't need to do anything like that and I just left the money in place. I should have just done the rollover to the govt TSP right when I started, I probably would have avoided this if I had done it back then. I only have myself to blame, I suppose.

I used to be that guy telling people like you that it couldn't happen.  As a compliance guy, it was important to follow the rules - the plan provider could get in a lot of trouble with the govt if they don't.  If you don't know the name of your Plan Administrator or Plan Trustee, you should. 

I realize it is frustrating, but if I was in your shoes (and I didn't know who the Plan Administrator and/or Trustee was/were - which it sounds like you don't [if you do know who it is and have contact with them, a call to them to get them on the same page as you would help]), I would call back and ask for the full name of this person.  I would then do a Certified Person Search and send certified letters to each of the last known addresses.  The letter doesn't have to be anything fancy.  Just have it be clear.  Make it understood that you need them to take action with the plan provider on your behalf and the others at your previous job that participated in the 401k plan.  Make copies of the letter that you send.  Give them 30 days to take action.  If they don't do anything, the certified sent letters should be sufficient for the plan provider to consider the plan inactive and they will do their own missing person's search... A good plan provider, with this information, could likely have your rollover done in about 90 days from the start of your first letter (if you have to resort to this). 

I have no idea how long it would take with a poor plan provider.  Just a heads up, you have likely called and dealt with someone that doesn't have any connection with Wells Fargo.  Chances are that WF is just the bank that is the custodian of the monies - be understanding with the CS people as they are not the ones that are able to do much - like I said and I am sure that they have said as well, it is up to the Plan Administrator.


dragoncar

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Re: Denied 401k Rollover?
« Reply #16 on: February 19, 2014, 12:35:57 PM »
I'd be tempted to do the following, with the caveat that I'm not 100% sure it will work:

Withdraw your 401k money.  WF will consider this a "cash out" distribution and report that to the IRS, but screw them they don't know WTF they are talking about.
Deposit it in a rollover IRA within the 60 day limit.

Expect a letter from the IRS.  But the IRS only cares if the rollover is legal, not about whether Wells Fargo has their shit together.  The IRS can be a hassle, but I think they are pretty reasonable -- they aren't going to claim you are still employed when you clearly aren't.  You can show that it wasn't a cash-out because you deposited the cash in your IRA.

So take the above with a grain of salt, but it may be the easiest way to move on with your life. 
« Last Edit: February 19, 2014, 12:38:52 PM by dragoncar »

quilter

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Re: Denied 401k Rollover?
« Reply #17 on: February 19, 2014, 12:54:16 PM »
I was thinking what dragon car said, but if you take the money out won't they withold a ten percent penalty plus taxes?  Then you would have to replace that money when you make the Ira deposit with other funds while you wait for your tax returns.  I believe the timeframe for rollover is 60 days. Is that a correct interpretation of how it works?
« Last Edit: February 19, 2014, 12:56:55 PM by quilter »

Another Reader

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Re: Denied 401k Rollover?
« Reply #18 on: February 19, 2014, 01:00:06 PM »
Please listen to what Fuzzhead is telling you.  Since the bank considers you still employed, they won't let you withdraw as Dragoncar advises anyway.

It's possible this could turn into a real headache if the company completed bankruptcy without addressing the 401k issue.  With only a couple of participants, it could have been overlooked.  Follow the path of the company to the plan administrator or plan trustee as Fuzzhead suggests. 

dragoncar

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Re: Denied 401k Rollover?
« Reply #19 on: February 19, 2014, 01:13:49 PM »
You can try escalating further.  Something like the following (although it's from 2008):

http://consumerist.com/2008/09/24/contact-info-for-wells-fargo-ceo-john-stumpf-and-friends/

You can also try contacting your local "consumer issues" news crew, or the state attorney general's office.

jenc229

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Re: Denied 401k Rollover?
« Reply #20 on: February 19, 2014, 02:56:54 PM »
I have some personal experience with this, my recommendations:

Note, I am not a professional, so YMMV.

1) Call WF back and find out the names and numbers of the plan administrators, custodian, trustee and ANYONE else who has the authority to make the employment status change for you.  Even though the company may not exist, WF has to go by what they have on file.  Call these people and ask them to contact WF on your behalf and make the employment status change. Note, you may be surprised who at the company has this access. 

2) IF WF has been notified the company is in bankruptcy, ask them for the trustees contact information.

3) If all else fails, contact the Department of Labor.  They do not mess around.  Trust me.