Undo 401k to 401k Rollover
I have a new client that made a mistake by rolling his old 401k to his new employers 401k plan when he changed jobs a couple of years ago. The plan investment choices are terrible and the costs are way too high. Is there a statute that allows him to roll the contributions from his old 401k that were rolled over to an IRA or would he need to wait until separation from service. Of course, if this is allowed, I suspect that it’s subject to the provisions of the plan but maybe not.
Permalink Submitted by Alan - IRA critic on Tue, 2016-11-29 01:30
You are correct. Rollovers into the plan are eligible for in service non hardship distributions from some plans, but not for others. It is difficult to come up with a quantitative figure on this feature. Client will have to check with his plan administrator. Another variable is whether the earnings on the old rollover are eligible for distribution as well or just the rollover amount. For many employees, it is a good idea to ask about this before doing the rollover into the plan.