What advice can I give them, or is there a procedure for this?
2006-09-08 07:40:49 · 8 answers · asked by Lucia G 1 in Business & Finance ➔ Small Business
The 401k that they have will continue, however there will be no additional money put into it. Your company has no action, it is the responsibilty of the new employee to manage their own retirement.
2006-09-08 07:49:01 · answer #1 · answered by words_smith_4u 6 · 1⤊ 0⤋
Not sure what you mean, "what do we do"...if this person is using their head, they realize that a company sponsored 401K plan is a "benefit" and should be looking at the total package (pay + benefits)...I assume his current employer is "matching" some % of his pay...unless you want to start offering a 401K plan for all of your employees, he should be asking you for more $ to compensate him for what he is getting (or can get) elsewhere. As an individual, he can invest in an IRA which looks and feels like a 401K without the company portion.
2006-09-08 14:46:44 · answer #2 · answered by The Kid 3 · 0⤊ 0⤋
Nothing. Since you don't offer a retirement plan, you have no interest in this. Do NOT give him any advice unless you're an attorney.
What he does with his 401k from a previous employer is between him and the plan administrator.
If you have some other retirement plan that allows rollover contributions, and if his 401k allows rollover payouts, get with your plan's administrator and have him or her handle the rollover transaction with the 401k administrator. If you don't offer any retirement plan at all, just stay out of it as it doesn't concern you at all.
2006-09-08 14:47:22 · answer #3 · answered by Bostonian In MO 7 · 1⤊ 0⤋
They should rollover the money into an account at a brokerage house such as Fidelity Investments or T. Rowe Price, to name two. Ideally they should do so within 60 days after leaving their employer. The personnel office and the folks at the brokerages will be able to help with it.
2006-09-08 14:47:34 · answer #4 · answered by mzJakes 7 · 0⤊ 0⤋
You don't need to do anything in paticular. If they are citing that as one of the reasons they may not accept the offer, you could consider offering more money or a signing bonus to mitigate some of the compensation they'll lose when they give up the 410 (k).
2006-09-08 15:02:49 · answer #5 · answered by Robin A. 3 · 0⤊ 0⤋
Nothing, they keep it & it sits & waits for them.
He will be looking for a place that has a 401 so he can keep building for his retirement, then, he can bring the other one with him to the new job, & merge them.
2006-09-08 14:56:37 · answer #6 · answered by fairly smart 7 · 0⤊ 0⤋
Tell them to roll it over into an IRA. Do not cash it in. It must be transferred to avoid taxes.
2006-09-08 14:47:06 · answer #7 · answered by Barkley Hound 7 · 0⤊ 1⤋
They can convert it to an IRA I think...
2006-09-08 14:46:42 · answer #8 · answered by MsSassy 5 · 0⤊ 0⤋