A little over a month ago I did an in-service direct rollover from my 401K to a ROTH IRA at the same institution as the 401K. This rollover included ROTH funds and after tax funds that were previously converted by 401K RIPC. The direct rollover went through fine; however, on the same day as the rollover an after-tax contribution came into the account (which neither I nor the agent could see at the time of the rollover) and part of that contribution was withdrawn and sent to me as a check made out to me. Which I never requested. I noticed this in my account two days after the rollover request and immediately called it in to the plan administrative institution (I received the check a week later with a statement that indicated the direct rollover part plus the amount of the check and the check part is listed as a “return of after tax contribution”).

Once I contacted the institution and reported the error they did a review of the recorded call to see if the agent made a mistake and concluded they didn’t after and that this was a timing issue and this is what is suppose to happen. This took 2.5 weeks. They then proceeded to contact my employer to get permission to do a correction and my employer did not respond for 2.5 weeks and only did because I reported this to my HR rep who contacted the retirement department. My employer’s response to the plan admin has been another question asking the plan admin if they could put the money back into my 401K. The administrator has communicated to my employer that they could do a correction to put the money back in my 401K, and we are now waiting on my employer again to give permission to do this.

So I am sitting here at at about 35 days since the check was cut. I think I have 60 days to get this fixed or it is considered an early withdrawal and have to pay a 10% penalty but no tax since it is after tax money.

The other option I am considering is doing a “60 day rollover” by taking the check to the administrators local office branch 30 minutes away and having them deposit into my ROTH IRA to complete a “60 day rollover”. I don’t really want to do this as it is not convenient, I don’t want to use my one in 12 month “60 day roller” in case I need it to correct something else in the next 12 months, and shouldn’t this be a correction since I never requested a check get mailed to me?

I am wondering what other options I have, if any since my employer is dragging their feet and the process to correct is going pretty slow? I have been told not to cash the check.

Thanks.