What remedies are available when former employer fails to distribute 401K or profit sharing?
If you haven't requested it yet, you may want to consider requesting a full copy of the employer's qualified plan. The terms and provisions of the particular plan may detail how distribtutions are to be handled upon termination of employment.
Generally, the law requires plans to pay retirement benefits no later than the time a participant reaches normal retirement age. But, many plans, including 401(k) plans, provide for earlier payments under certain circumstances. For example, a plan's rules may provide that participants in a 401(k) plan would receive payment of his or her benefits after terminating employment. The plan's SPD or Summary Plan Description should set forth the plan's rules for obtaining the distribution as well as the timing of distribution after termination of employment.
Federal retirement law requires all plans to have a reasonable written procedure for processing your benefits claim and appeal if your claim is denied. The Summary Plan Description (SPD) should include your plan’s claims procedures. Usually, you fill out the required paperwork and submit it to the plan administrator, who then can tell you what your benefits will be and when they will start.
If there is a problem or a dispute about whether you qualify for benefits or what amount you should receive, check your plan’s claims procedure. Federal law outlines the following claims procedures requirements:
Once your claim is filed, the plan can take up to 90 days to reach a decision, or 180 days if it notifies you that it needs an extension.
If your claim is denied, you must receive a written notice, including specific information about why your claim was denied and how to file an appeal.
You have 60 days to request a full and fair review of your denied claim, using your plan's appeals procedure.
The plan can take up to 60 days to review your appeal, as well as an additional 60 days if it notifies you of the need for an extension. The plan must then send a written notice telling you whether the appeal was granted or denied.
If the appeal is denied, the written notice must tell you the reason, describe any additional appeal levels, and give you a statement regarding your rights to seek judicial review of the plan’s decision.
If you believe the plan failed to follow ERISA’s requirements, you may decide to seek legal advice if the plan denies your appeal. You also can contact the Department of Labor concerning your rights under ERISA by calling toll free 1.866.444.3272.
For more information on claims procedures, see the Department of Labor publication Filing a Claim for Your Retirement Benefits or call toll free 1.866.444.3272.
Contact your plan administrator to get the paperwork that you need to file a claim to start receiving retirement benefits.
Contact the Department of Labor (EBSA) by calling toll free 1.866.444.3272 if you have questions about your plan or your rights under ERISA.
Chapter 7: Responsibilities Of Plan Fiduciaries
In every retirement plan, there are individuals or groups of people who use their own judgment or discretion in administering and managing the plan or who have the power to or actually control the plan’s assets. These individuals or groups are called plan fiduciaries. Fiduciary status is based on the functions that the person performs for the plan, not just the person’s title.
A plan must name at least one fiduciary in the written plan document, or through a process described in the plan, as having control over the plan’s operations. This fiduciary can be identified by office or by name. For some plans, it may be an administrative committee or the company’s board of directors. Usually, a plan’s fiduciaries will include the trustee, investment managers, and the plan administrator. The plan administrator is usually the best starting point for questions you might have about the plan.