401(k) plus separate ESOP

[AnnieR]

Quite a few of my clients work for American Standard, which was sold to Bain and as of today operates as AS Americas. These people had a 401 (k) plan with a 3% match which was in American Standard stock (the ESOP). Is there any reason why some of these people are being told that they can't roll over the ESOP? I realize investment brokers are all over these people trying to get all they can, and the company has been no help in explaining anything to the employees. Since there is no more American Standard, their stock in the ESOP is being replaced by Trane. Many of them have quite a bit of money put into these plans. Some brokers are pushing the older ones to cash out the ESOP and pay capital gains taxes as an NUA. Others are telling them they must cash it out as it can't be rolled over. Any ideas out there?

AnnieR

[kcjenkins]

I think there is a communication problem here. Whether you can roll a 401K over into another 401K depends on how the second plan is set up. But if they can not role into the new plan, they can still roll over the old 401K into an IRA.

[Pacun]

When acquisitions happen, there is no choice but to leave the 401k and everything else on the new 401k because these newly "purchased" employees belong to the new company and people cannot be rolling over their 401k if they continue working with the new company.

When I was "purchased", I decided to moved to the parent company. By mistake, they terminated me and the new company hired me. They sent me a ESOP check which I cashed. A month later, I got a call from the 401k administrator asking if I wanted to return the money because they made a mistake. They went on to say that the rehiring situation should never had happened because I was an employee of the parent company.