My dad's company sucked the money outta his 401k?! Is this legal?

[Geocentricity]

I'm in my room and I hear a conversation between my mom and dad concerning his 401k. The company isn't doing so well nowadays and a lot of factories and shutting down. So about 3-4 months ago my dad requested to withdraw his 401k. His boss kept telling him that he can't blah blah blah and since my dad's english isn't top-notch he felt powerless to go any further. A letter comes in the mail today and apparently the 401k fund is now at $0.00, the money disappeared or was sucked out by someone.

WTF are the legal implications of the company's actions? I'm worried not because I think my dad won't be able to retire with a nice nestegg, but rather that he was taken advantage of and cheated of his money.

ATOT, help!!

 

[BigJ]

Gee...should I consult an attorney or ask ATOT?

Decisions, decisions...

 

[ryan256]

I'm not sure about company contributions. He may or may not have been vested in those. But if they also emptied his own contributions thats a definite law suit.

 

[JS80]

you're definitely not getting the whole story. now use your wang and get the details.

 

[FoBoT]

you can't take the $ out of your 401(k) unless you stop working there
he would have to quit or retire to pull it or roll it over to an IRA

 

[JS80]

the company can't withdraw from a person's personal 401k account. something's not right. you're not hearing the whole story.

 

[Geocentricity]

Originally posted by: JS80
you're definitely not getting the whole story. now use your wang and get the details.

My dad's wang fathered 3 Wangs (no pun intended ). And I think I will start asking for the details, hope I don't get a "don't worry about me" response

 

[ch33zw1z]

response to "don't worry about me" is: "I'm not, I'm worried about payin for your punk ass when you're OLD FOO!!1"

and your company cannot spend your 401k..

 

[AznMthr]

some companies are shady...maybe he borrowed against it, which he can do. but reading the post, it doesnt look like he did. gl either way.

 

[HardcoreRobot]

you definitely dont have the full story.

perhaps your dads request DID go through and they cut him a check for the amount. though... i would expect the account to stay full until the check was cashed.

you sure it was a 401 and not some sort of pension? im pretty sure companies reserve the rights to change their pension plans at will

 

[Rastus]

As an ex Worldcom employee, whose asshole still drips blood five years later, I can verify for certain that the employer can take your money out of your 401k plan anytime they think they need to.

 

[Kevin]

401(k) are sheltered from creditors, pension plans are not though pensions are usually insured. Find out if he does indeed have a 401(k). If he does, they could have changed the plan provider resulting in a $0.00 account balance statement.

 

[JulesMaximus]

He work for Enron?

 

[NL5]

Originally posted by: Rastus
As an ex Worldcom employee, whose asshole still drips blood five years later, I can verify for certain that the employer can take your money out of your 401k plan anytime they think they need to.

They didn't take any money out did they? I thought worldcom employees had their 401k's in WC stock, and the stock price fell through the floor.

 

[Rastus]

Originally posted by: NL5

Originally posted by: Rastus
As an ex Worldcom employee, whose asshole still drips blood five years later, I can verify for certain that the employer can take your money out of your 401k plan anytime they think they need to.

They didn't take any money out did they? I thought worldcom employees had their 401k's in WC stock, and the stock price fell through the floor.

That is actually the case, but we were under extreme pressure from management and from the brokerage house to invest in WC stock. The people that margined got hurt the worst. The bad part about it, when things started going south, they froze our accounts so we couldn't transfer into safer investments. So, we took some real losses and all we could do is watch.

 

[Pacfanweb]

Originally posted by: FoBoT
you can't take the $ out of your 401(k) unless you stop working there
he would have to quit or retire to pull it or roll it over to an IRA

Yes you can. You can completely stop the 401k and use it for a freaking vacation if you want...just not tax-free.

 

[FoBoT]

ok. my bad

so you just have to pay the 10% penalty, so it is just like an early withdrawl from an IRA?

 

[miniMUNCH]

This kinda of thing is why my dad never put a dime into his 401K...all real estate and/or IRA.

I don't even have direct deposit... I don't want any company I work for having any strings attached to the money they pay me.

 

[K1052]

Originally posted by: miniMUNCH
This kinda of thing is why my dad never put a dime into his 401K...all real estate and/or IRA.

I don't even have direct deposit... I don't want any company I work for having any strings attached to the money they pay me.

401Ks with company match are still good, just don't put anything into company stock no matter what they say to you. Granted that your 401k shouldn't be your only investment.

 

[Yossarian]

Originally posted by: miniMUNCH
This kinda of thing is why my dad never put a dime into his 401K...all real estate and/or IRA.

I don't even have direct deposit... I don't want any company I work for having any strings attached to the money they pay me.

too bad your dad doesn't like free money.

 

[JS80]

Originally posted by: Rastus

Originally posted by: NL5

Originally posted by: Rastus
As an ex Worldcom employee, whose asshole still drips blood five years later, I can verify for certain that the employer can take your money out of your 401k plan anytime they think they need to.

They didn't take any money out did they? I thought worldcom employees had their 401k's in WC stock, and the stock price fell through the floor.

That is actually the case, but we were under extreme pressure from management and from the brokerage house to invest in WC stock. The people that margined got hurt the worst. The bad part about it, when things started going south, they froze our accounts so we couldn't transfer into safer investments. So, we took some real losses and all we could do is watch.

you could have bought options or shorted in another account to hedge that account.

 

[tk149]

Originally posted by: Rastus

Originally posted by: NL5

Originally posted by: Rastus
As an ex Worldcom employee, whose asshole still drips blood five years later, I can verify for certain that the employer can take your money out of your 401k plan anytime they think they need to.

They didn't take any money out did they? I thought worldcom employees had their 401k's in WC stock, and the stock price fell through the floor.

That is actually the case, but we were under extreme pressure from management and from the brokerage house to invest in WC stock. The people that margined got hurt the worst. The bad part about it, when things started going south, they froze our accounts so we couldn't transfer into safer investments. So, we took some real losses and all we could do is watch.

While you have my sympathy, your first statement is deliberately misleading, or I misunderstand you. Worldcom did NOT take (vested) money out of your 401K. You simply failed to diversify your holdings.

 

[tk149]

Originally posted by: K1052

Originally posted by: miniMUNCH
This kinda of thing is why my dad never put a dime into his 401K...all real estate and/or IRA.

I don't even have direct deposit... I don't want any company I work for having any strings attached to the money they pay me.

401Ks with company match are still good, just don't put anything into company stock no matter what they say to you. Granted that your 401k shouldn't be your only investment.

I disagree. It's bad to put too much money into your company's stock, because you SHOULD diversify. If your company fails, you lose your main source of income (wages) AND your savings (company stock).

But if the company does well, and you have some money invested in the company, you come out ahead. And since you are with the company, you have an incentive to make sure that you do your job well. Also, the younger you are, the more risks you should take to increase your wealth.

A 401K has an additional advantage over IRA's. The money is not taxed when you are paid. The money immediately goes into an investment. With an IRA, you don't get the non-taxed portion back until you get your tax refund, so you lose the use of that money until the government decides to pay you back.

 

[K1052]

Originally posted by: tk149

Originally posted by: K1052

Originally posted by: miniMUNCH
This kinda of thing is why my dad never put a dime into his 401K...all real estate and/or IRA.

I don't even have direct deposit... I don't want any company I work for having any strings attached to the money they pay me.

401Ks with company match are still good, just don't put anything into company stock no matter what they say to you. Granted that your 401k shouldn't be your only investment.

I disagree. It's bad to put too much money into your company's stock, because you SHOULD diversify. If your company fails, you lose your main source of income (wages) AND your savings (company stock).

But if the company does well, and you have some money invested in the company, you come out ahead. And since you are with the company, you have an incentive to make sure that you do your job well. Also, the younger you are, the more risks you should take to increase your wealth.

A 401K has an additional advantage over IRA's. The money is not taxed when you are paid. The money immediately goes into an investment. With an IRA, you don't get the non-taxed portion back until you get your tax refund, so you lose the use of that money until the government decides to pay you back.

Personally, I prefer to diversify my 401K/IRA through various funds/ETFs and not invest in a single stock for retirement savings. I have a regular brokerage account for my non-retirement stock buys.

 

[IBuyUFO]

I bet your dad used the money to bet on the superbowl He also insured himself from getting yelled at by the wife in case he lost the money by saying that the company took away his 401k. Your dad is brilliant!