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What happens to my 401k money if my employer declares bankruptcy?
Does it matter if I am a retiree or a current employee?
thanks
Jane wrote:
> What happens to my 401k money if my employer declares bankruptcy?
>
> Does it matter if I am a retiree or a current employee?
>
> thanks
I hope none of your funds were in the company stock. That's likely gone.
The rest should be fine, the employer should have nothing to do with it,
the funds are supposed to be sent to the custodian (i.e. broker) within
X days of the pay cycle. You should contact the Broker directly and you
may decide to transfer the funds directly to an IRA.
(Worst case - one or two deposits were 'lost' before getting to the
custodian. This shouldn't happen, but that's the tougher money to get
back, if it did)
JOE
In article <1...@b...googlegroups.co
m>,
"Jane" <g...@y...com> wrote:
> What happens to my 401k money if my employer declares bankruptcy?
The 401K money becomes yours when it is set aside. The
employer is supposed to send a check every so often to
the plan administrator every so often. It is your duty
to verify that those payments are credited to your account.
If the employer goes toes up, the worst that should happen
is you lose you most rent contributions for up to maybe
45 days. If the employer has been failing to send in checks
beyond that, you should have noticed that your account was
not being credited, and you should have spoken up.
> Does it matter if I am a retiree or a current employee?
If you have cone a roll-over to an IRA, then the employer
is out of the picture, and you are totally safe. If you
kept the 401K with the employers plan after you retired,
your only risk would be that some payments were not sent
in. Again, that would be your job to verify that everything
was credited to your account.
Some employers get into the habit of being late in sending
in 401K payments, or totally fail to do so when they get
into financial problems. Again, it is your job to watch
for this, and decide what action to take. I usually suggest
getting out before the company goes under. That way, you
are first in line to get your paycheck, vacation, and
retirement plans straightened around. I don't want to be
there unexpectedly jobless and then not know if I will
every see my last paycheck, back vacation pay, and then
have lost 9 months of 401K contributions.
-john-
--
====================================================
==================
John A. Weeks III 952-432-2708 j...@j...com
Newave Communications http://www.johnweeks.com
====================================================
==================
Jane,
In addition to the other guys comments, you may have some trouble with
any employer-matching contributions that have not yet been paid or
have been paid but not fully vested. It varies on a case-by-case basis
so its hard to know for sure.
However, if you are retired there is less likely to be an issue with
this, but it is possible (especially if you retired very recently).
Good luck.
On Mar 19, 5:45 am, "Jane" <g...@y...com> wrote:
> What happens to my 401k money if my employer declares bankruptcy?
>
> Does it matter if I am a retiree or a current employee?
>
> thanks
In addition to others's comments, if you are retired, you should
consider rolling your 401K into a rollover IRA, whether your employer
is in trouble or not.
On Mar 19, 8:45 am, "Jane" <g...@y...com> wrote:
> What happens to my 401k money if my employer declares bankruptcy?
>
> Does it matter if I am a retiree or a current employee?
>
> thanks
Thanks.
I should have mentioned that my employer is John Hancock and all the
funds in the 401k are Hancock managed funds. Does that change the
picture? I do not have any Hancock stock funds.
In article <f...@c...com>,
joetaxpayer <j...@n...com> wrote:
> Jane wrote:
>
> > What happens to my 401k money if my employer declares bankruptcy?
> > Does it matter if I am a retiree or a current employee?
> I hope none of your funds were in the company stock. That's likely gone.
That is a really good point. But the cynical streak in me wants
to say that after all the Enron publicity, anyone who holds a
non-trivial amount of their retirement in company stock more or
less deserves all the bad things that might happen to them. It
is hard to have much sympathy after hearing about Enron year after
year.
-john-
--
====================================================
==================
John A. Weeks III 952-432-2708 j...@j...com
Newave Communications http://www.johnweeks.com
====================================================
==================
In article <1...@e...googlegroups.co
m>,
"Jane" <g...@y...com> wrote:
> On Mar 19, 8:45 am, "Jane" <g...@y...com> wrote:
> > What happens to my 401k money if my employer declares bankruptcy?
> >
> > Does it matter if I am a retiree or a current employee?
> I should have mentioned that my employer is John Hancock and all the
> funds in the 401k are Hancock managed funds. Does that change the
> picture? I do not have any Hancock stock funds.
These managed funds should be covered by SIPC. But note that
there are limitations on what SIPC covers, and how much SIPC
pays out. And lets say the worst does happen, do you want to
be retired and have to wait several months while SIPC sorts
out the situation before you can get at your money? I think
common sense would suggest that if you have to have this money
to live, you want it in at least 2 different companies. Or
at least have 6 months worth of living expenses set aside in
a bank that is not connected to John Hancock.
-john-
--
====================================================
==================
John A. Weeks III 952-432-2708 j...@j...com
Newave Communications http://www.johnweeks.com
====================================================
==================
On Mar 19, 2:23 pm, "Jane" <g...@y...com> wrote:
> On Mar 19, 8:45 am, "Jane" <g...@y...com> wrote:
>
> > What happens to my 401k money if my employer declares bankruptcy?
>
> > Does it matter if I am a retiree or a current employee?
>
> > thanks
>
> Thanks.
>
> I should have mentioned that my employer is John Hancock and all the
> funds in the 401k are Hancock managed funds. Does that change the
> picture? I do not have any Hancock stock funds.
You mean you don't have any Hancock stocks.
I don't know if it makes a difference or not. But even assuming there
is a Chinese wall separating the main company from the funds
management company, I think it's safe to roll it into a rollover IRA.
>
> I should have mentioned that my employer is John Hancock and all the
> funds in the 401k are Hancock managed funds. Does that change the
> picture? I do not have any Hancock stock funds.
The company is reporting 21% growth in income and earnings per share for
2006 over 2005. Moody's has increased its rating to AAA, "one of only two
publicly traded life insurance companies with 'AAA' rated insurance
subsidiaries worldwide".
Why do you think John Hancock may be declaring bankruptcy?
Elizabeth Richardson
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