A 401k is an employer-sponsored retirement savings and investment plan that provides employees with significant tax benefits. Employers typically outsource the administration of 401k plans to investment companies, which provide employees with a variety of stock and bond fund choices. When an employer offers more than one provider, an employee may opt to switch between companies. Providers are usually happy to administer the paperwork and facilitate such a transfer, but whether you can make the switch depends on your plan provider's policy.
Contact your human resources representative. Your company's human resources department is the first point of contact for employees looking to switch providers and can shed light on what you're permitted to do. For example, your company may not allow you to transfer assets to a new 401k account, but you may be able to transfer assets to a company-sponsored IRA. Alternatively, you could suspend contributions to your old provider and begin new contributions to your new provider. What each company allows is different.
Contact your new 401k provider. Plan providers are usually happy to facilitate transfers on your behalf. Give the new provider your account number from the old provider. You may need to fill out a 401k transfer form. Often, these forms need to be notarized. If that's the case, see if your human resources department can suggest a local notary.
Complete the paperwork and return copies to both your human resources department and your new provider. Don't forget to complete the section on the application that identifies beneficiaries. Accounts that have named beneficiaries aren't subject to probate, which speeds asset distribution in the event that you die.
- Be certain to speak with your human resources department before proceeding. Unsanctioned rollovers can result in tax penalties if not handled properly.
Items you will need
- Account number of old 401k plan
- Asset value to be transferred
- Beneficiary contact information
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