A client of mine came today with a scenario that I had never seen. She had worked for a company for three years, held about $60K in a 401K, but four months after being laid off she hasn't been able to rollover her funds to an IRA. Since she's had trouble finding a job in software (cutbacks), she doesn't want to sue or cause legal trouble for her former employer, as it would cause a loss of money and look bad for future companies.
However, $60K isn't nothing and the company's plan is expensive (no index funds; every mutual fund has a minimum of a 1.5% fee)
- Is it legal for a company to hold 401k money after a layoff for over four months? The administrator cannot let her transfer because they have not received any lay off notice.
- In her case, she doesn't want to sue for obvious reasons even though I feel she's being bullied; are there any other options she has - such as a form to submit to the administrator requesting the funds that can override the lack of a notice?