Re-employment assumption
Some people think that leaving their money in an old 401 (k) enhances (or enables them to enhance) the odds of re-employment at their old employer. Employers cannit consider this in re-employment decisions, but I request to learn of any resource that would convince a former employee of this. Otherwise, former employees might make hiring managers nervous by touting such a decision when those managers are not supposed to favor anyone on such a basis; this bad assumption also inhibits the former participant from moving money to better investments than are available in the old 401 (k). So, what article, reg, or law would dispel this bad assumption?
Permalink Submitted by Dan Gallagher on Thu, 2016-07-21 18:05
It appears that an employer who learns that an employee believes that keeping money in the old 401(k) (when reapplying to that old employer) would increase chances of re-employment would be very nervous to learn that from the former employee. Potentially, the employer would feel placed in the position of linking the employment decision to the investment hold decision without knowing whether — for that applicant’s perfonal financial situation — the investment hold decision is best for that applicant. Hence, the employer might even deny employment in order to preclude being placed in this conflict. The problem of providing this logic to former employees who have such an incorrect assumption remains: What article or reg or interpretation would provide a thrird-party cautuion to such a misunderstanding former employee so that that person would feel free to roll assets to an IRA that would be better for that person’s situation & unique needs?