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Can I leave my retirement plan account balance in my previous employer’s plan after I terminate my employment?

Most plans will allow you to leave your vested balance in the plan if your vested account balance is greater than $5,000.  However, the Summary Plan Description will dictate the exact vested balance that will allow you to leave your balance in the plan.

Can I leave my retirement plan account balance in my previous employer’s plan after I terminate my employment?

Most plans will allow you to leave your vested balance in the plan if your vested account balance is greater than $5,000.  However, the Summary Plan Description will dictate the exact vested balance that will allow you to leave your balance in the plan.

If the balance of my retirement plan account is “$5,000 or less,” what will happen?

Paperwork will be mailed to you from Retirement Clearinghouse giving you various options for cashing out, rolling the money over to an IRA, or moving the money into another company’s retirement plan.  You will be given a maximum of 30 days to make your distribution election.  If Pension Dynamics doesn’t hear back from you within 30 days, your funds will be rolled over to an IRA at Retirement Clearinghouse.  You will need to contact Retirement Clearinghouse after the 30-day period for access to your Rollover IRA.

Will I be charged any fees if I leave my money in my previous employer’s plan?

As each plan can choose whether to charge maintenance fees, you should contact your previous employer’s Plan Representative or you can call Pension Dynamics to obtain that information.  Additionally, if you have a copy of the Summary Plan Description (SPD) and Administrative Policies from your previous plan, you can review it to find out if fees are paid by plan participants.

What is vesting, and how does it impact me?

Your plan may have a vesting schedule for the employer contributions based on your years of service.  The “vested amount” is the value of your account that is available to you when you leave the company.  The Plan document determines the number of years it takes to be 100% vested.  This information can also be found in your Plan’s SPD.

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