IRA Rollover

Archive for October, 2009

Question: Can my employer combine my 401k with a 401k from a prior employer with whom they merged w/o my OK?

The older 401k dates back to 1997 when I worked at ABC Bank. I worked at DEF bank from 1997 to 2006, with a new 401k which I rolled to an IRA when I left. In 2006, I moved to XYZ bank and started a new 401k, still choosing not to rollover the one from ABC Bank. I found it easier to track the performance in the ABC Bank 401k because it’s not active. In 2008, my employer XYZ bank merged with ABC bank. Each bank served as their own 401k trustee at the time. In 2009, after they merged, they outsourced the accounting to ING and the two accounts became one. The 401k expert in our HR department said I can have only one 401k account under my SSN. Can they override my preference and force me to accept a consolidation of what I consider two separate and distinct 401k accounts? Thank you.

Answer: Your HR expert is wrong about having one 401k per SSN. I have had as many as three, and it is perfectly legal. However, it may not be allowed for you to have two within their plan.

Your firm does have the right to modify the 401k plan, and to consolidate two of them. It is a cost-effective decision for them.

It would be nice if the resulting plan was the best of both. From your tone, I suspect that is not the case.

I suggest that you read up on the new plan and its investment options, and do the best you can with those choices.

ING IRA Rollover