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+--- Thread: [$$$] 401k rollover - denied! (/showthread.php?tid=147073)
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[$$$] 401k rollover - denied! - mattkime - 01-10-2013
I was previously working at company X which used Trinet as a coemployer and Transamerica for 401k. I was between jobs for two weeks before starting at company Y which uses Trinet as a coemployer and uses The Online 401k for (you guessed it) 401k.
I attempted to roll over my 401k from my previous employer into my Vanguard Rollover IRA account. I've been told that I can't since Trinet is the employer of record and as far as the IRS is concerned I still have the same job.
(i don't really expect anyone to have an answer to this but its worth a shot)
Re: [$$$] 401k rollover - denied! - TLB - 01-10-2013
When a company outsources HR functions to a employer organization like TriNet, the HR company in the coemployer agreement actually is your employer of record. The employer of record is responsible for payroll and payroll tax compliance, benefits administration, workers compensation, processing unemployment claims, and other HR-related administrative tasks. Your company Y remains the worksite employer and continues to retain day-to-day control and direction of the worksite employees. Since TriNet is your employer of record and manages your benefits, I can understand the IRS position. Unfortunately I don't know how to work around it
Re: [$$$] 401k rollover - denied! - tronnei - 01-10-2013
So, when you worked for company x, you were actually a Trinet employee and were paid by Trinet. Now you work for company y but are still a Trinet employee and are still paid by Trinet. Do I have that right?
If the above is correct, then you were correctly denied a rollover distribution from the 401(k) plan. You have to have a severance of employment in order to receive a distribution, and in the eyes of the IRS you haven't, since your old "employer" and new "employer" are actually the same.
Re: [$$$] 401k rollover - denied! - mattkime - 01-10-2013
>>You have to have a severance of employment
I did have a severance of employment. I ended with X (and Trinet) before starting with Y two weeks later.
This is really going to get into legalese.
Re: [$$$] 401k rollover - denied! - space-time - 01-10-2013
but is this an issue? you now have 2 401ks, both should grow. You should still be able to log in to the old 401k and redistribute money between different funds, there is no additional money going into it.
When you get a new job (not with Trinet) you should be able to roll both of those 401ks into an IRA or a new 401k, is that correct?
Re: [$$$] 401k rollover - denied! - mattkime - 01-10-2013
401k fund choice isn't optimal and involves maintenance fees that aren't part of my Rollover IRA.
Its more expensive.
space-time wrote:
but is this an issue? you now have 2 401ks, both should grow. You should still be able to log in to the old 401k and redistribute money between different funds, there is no additional money going into it.
When you get a new job (not with Trinet) you should be able to roll both of those 401ks into an IRA or a new 401k, is that correct?
Re: [$$$] 401k rollover - denied! - tronnei - 01-10-2013
mattkime wrote:
>>You have to have a severance of employment
I did have a severance of employment. I ended with X (and Trinet) before starting with Y two weeks later.
This is really going to get into legalese.
And if you had requested a distribution during that two week period, it would have been allowed. But now you're reemployed by the same employer, so a distribution is off the table.
That's the way it works.
Re: [$$$] 401k rollover - denied! - Janit - 01-10-2013
So the next time you have a change in status, be sure to file for the rollover immediately. If your current situation looks to be long term, and you get promoted to a "different" position, perhaps you could have the promotion configured as a "gap" in your employment. Of course, the possibility for this would depend on the comfort level you have with your employer.
Re: [$$$] 401k rollover - denied! - AllGold - 01-10-2013
Some companies allow an "in-service" rollover, meaning you can do it even if you haven't left the job. But it's only some companies and those who do rarely advertise it.
Re: [$$$] 401k rollover - denied! - tenders - 01-10-2013
There may be an annouing small fee here or there but total fees in your 401k are likely lower than the total fees in your IRA. Companies like Fidelity LOVE to have people roll out of 401ks and into IRAs for exactly that reason. I'd keep the 401k and instead make the case to consolidate the assets in the funds you like the best. (can you really pick the fund now that you'll have liked the best in 1,3,5 years? Tough to do.)