Wife is trying to roll her IRA from a previous employer to an new fund manager. Trying to get the current one to cash it out has been a trial of numerous phone calls, long complicated forms, in short the old runaround. Now they"ve come up with a new one. Only going to give her a little over half what they list in the account. Claim she wasn"t "vested" in the account long enough before she was discharged from that employer - all the "employer" contributions are being witheld. Donno where the money goes - was shown on her last statement, but apparently, either the employer or the IRA company gets to keep it. GRRRRrrr.
- Thread starter RayP(MI)
- Start date
Tramway Guy
Well-known Member
Maybe... Maybe not. SEP-IRA accounts cannot have vesting. Only 401(k) plans.
David G is right.
Most companies you have to be with the company "X" years before you are allowed to have the money the company invested into your account.
For Example lets say I work at the XYZ company for 3 years. I make $50k per year. I put in 10% of my pay, so.......for 3 years times $5000 per year = $15,000. And.....my employer puts in 50 cents on the dollar of every dollar I put in......so I also have $7500 on top of the $15000 I put in. Then........I leave at the 3 year mark......BUT......I had to be there 5 years to be FULLY VESTED in the money that the company "gave" me So I would only get 60% of the money the company "gave" me. This is an incentive for employers to keep people from leaving.
This exact type of thing that I described happened all the time at a place I worked at in the 1990s. It was a big company, Mfg plant with high turnover. Of course the owner was swimming in money. He sold the company in 1995, filthy fricken rich now.
Most companies you have to be with the company "X" years before you are allowed to have the money the company invested into your account.
For Example lets say I work at the XYZ company for 3 years. I make $50k per year. I put in 10% of my pay, so.......for 3 years times $5000 per year = $15,000. And.....my employer puts in 50 cents on the dollar of every dollar I put in......so I also have $7500 on top of the $15000 I put in. Then........I leave at the 3 year mark......BUT......I had to be there 5 years to be FULLY VESTED in the money that the company "gave" me So I would only get 60% of the money the company "gave" me. This is an incentive for employers to keep people from leaving.
This exact type of thing that I described happened all the time at a place I worked at in the 1990s. It was a big company, Mfg plant with high turnover. Of course the owner was swimming in money. He sold the company in 1995, filthy fricken rich now.
gtractorfan
Well-known Member
Another thing that don't make sense, if you have accounts other than IRA's with a broker the various accounts declare dividends at the end of the year. You have to pay income tax on the dividends. But at the same time the value of your accounts may have gone down.
Dave H (MI)
Well-known Member
Ray, I don't profess to be an expert on retirement plans, it is a specialized area, BUT those I have worked with that dealt with an IRA required 100% vesting. You can save yourself a lot of heartache by gathering all the plan paperwork and taking them with you to your tax preparer...who hopefully is qualified...and have them tell you exactly what form her retirement plan takes and how/if vesting applies.
Twenty six years, but less than 3 years with this IRA program. Apparently employer was prepping for this as a number of older employees were discharged short of the IRA magic three years. Agent handling this is surprised, and has indicated that this has happened in other cases where health care employers are involved.
TomH in PA
Well-known Member
Value of the account is a capital gain or loss that isn"t counted until you sell. Dividends are income.
James Williams
Well-known Member
Ray,The IRA plan I had,When people left the co. or was discharged the money that the co put in to your account was divided up with all the employees.I worked for a company that had a 401 account and they went bankrupt,I received about 1300.00 more than I had in it.This has been 35 years ago and I dont remember what they called it
jimmy
jimmy
TomH in PA
Well-known Member
That's why I stopped using "full service" brokers/agents a long time ago; they only serve themselves. Online discount brokers are cheap and you control everything.
I had one do something similar to me again just recently. I bought a new Blue Cross policy without using an agent,and when I went to cancel all four of the policies that an agent had thrown together for me to supposedly give me "complete coverage" I found out that what he had sold to me as disability was actually a whole life life insurance policy.
Worthless lowlifes!
Worthless lowlifes!
Traditional Farmer
Well-known Member
- Location
- Virginia
When you sign up for these type things you're given a set of rules and regulations that almost no one reads but are very important as you have found out.Read before you sign or join into anything if you don't its your own fault as to the outcome.Never take the person's word for it that you are talking to as their interest is to sell you on it for them to make $$$.
Anonymous-0
Well-known Member
have the new fund manager get the funds. it has to go directly to them anyways if you don't want to be taxed at the present time. the new fund manager will get it. they not only want the funds (business), they wont put up with thier crap and also know the loop hole's cause they retrieve funds all the time. as far as not getting the whole amount, you just going to have to go by the rules and probly bite the bullet.
RandyB(MI)
Well-known Member
At the company I retired from a year ago, the fully vested time was 6 yrs but it was progressive during those 6 yrs. Also had a policy that the only way you could get at it was to either reach age 62 or terminate employment. If you terminate employment they had a full year in which to give it to you, and used every bit of it. If you retired or just requested it at age 62 it took about a week. You could keep working and still draw it all out and roll it over without paying tax. I got mine out as soon as possible and rolled it over into my own IRA. By law they could make their retirement age where ever they want. Government sets min at 59 1/2 but there is no maximum. It's completely up to the individual plan what age they choose to let you have it. I get to laugh last because at my present retired income level, I can draw out $10,000 a year and owe no income tax on it, which I will do just to get it out. It draws less than 2% int and no one is going to use my money for free. Yes they will make it a PITA whenever they can.
MarkB_MI
Well-known Member
- Location
- Motown USA
The statements should have clearly stated how much of the employer's contributions were vested. If it didn't say so, then I think it is reasonable to assume they should be fully vested.
Is this an SEP-IRA or a 401k? As Tramway guy said, if it's an IRA, then the employer's contributions must be 100 percent vested from day 1. The IRS is very unambiguous about this, see the link below.
Did the employer roll an old retirement plan into a 401k? In other words, were their contributions actually from the old plan? If so, I'd say it's time to talk to a lawyer.
IRS vesting rules
Is this an SEP-IRA or a 401k? As Tramway guy said, if it's an IRA, then the employer's contributions must be 100 percent vested from day 1. The IRS is very unambiguous about this, see the link below.
Did the employer roll an old retirement plan into a 401k? In other words, were their contributions actually from the old plan? If so, I'd say it's time to talk to a lawyer.
IRS vesting rules
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