It's January, so I, like everyone else, am collecting the various tax documents that arrive in the mail. I was surprised to see a year-end summary of the 401K I had from my former employer. I had transfered that account to an IRA in July of 2005, so the 401K account had a zero balance. The statement I received this month shows a $0.01 balance. It turns out my employer saw the need to give me a penny in Feb of 2006.
So I called Fidelity who manages the 401K account. After a short wait and a notice that the conversation may be recorded for my safety, I got a very nice guy on the phone who confirmed my identity and asked how he could help. I told him the story and we laughed a little bit and concluded that I wanted them to send me a check for a penny. He read some boiler plate legal stuff and I said uh huh. Then he asked if I had see the document outlining tax consequences (of a penny) of withdrawl within the last 3 months. I said "Let's say that I have". He asked something else and then asked me to hold.
After a short while he came back to me and asked if I had internet access. Because I had said "Let's say that I have" and it was recorded, they wanted to make sure I saw the form. He said, if I had answered slightly differently we would not have had to do this. Ugh. So I found the 9 page document I needed to see. I didn't actually have to read it and if anyone listens to the recording they plainly know I didn't have to time to, but he said it was enough, they had provided the document as they were required to. He then asked if I want to expedite the shipping of the check for a fee of $25 or $45 or something. We both laughed at paying to send a one penny check quickly.
I tried to the read the 9 page document, I couldn't do it. It's filled with all this stuff of if you have this kind of account or that kind of account you can or can't do something, etc. Roth stuff is taxible and can't be rolled over, blah blah blah. As an example, here's part of the first paragraph:
"As a participant in the Plan you must receive these notices at least thirty (30) days prior to your distribution, and you must receive a new notice if you have received the notice more than one hundred eighty (180) days prior to taking a distribution. You can waive the thirty-day period and take a distribution immediately after receiving the notices. You will be considered to have waived the remaining unexpired period if you elect a form of payment before the end of the 30-day period."
So you must get this 30 days before you take or money, unless you don't want to. It's all just lawyerese of companies covering their asses. They can claim they fully informed you and they did, they just did so in such a way that it's completely uninformative. Unless you want to be informed in which case you have a pay another lawyer or tax professional to actually inform you, or just do what they think is right for you if you don't want to be informed about what they do.
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