| [b]COMPLICATED 401K ISSUE: A FINANCIALLY IRRESPONSIBLE MOVE? |
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ostatetulsa
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| [b]COMPLICATED 401K ISSUE: A FINANCIALLY IRRESPONSIBLE MOVE? |
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I currently work for a publicly traded company who funds their employer 401(k) contribution with a 50% match in company stock. My company is currently evaluating the feasibility of switching TPAs to an organization who will no longer allow the match to be funded in this manner. This organization has recommended a plan where they will accept the stock match from my employer, sell it for a fee of about .05%, and then transfer the proceeds into each respect employee's accounts.
Does this sound like a very bad idea to anyone else?
Is there someone out there that could help me to understand the goods and the bads of this type of arrangement.
HELP!
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Fri Jun 22, 2007 4:09 pm |
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coaster
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It's not a good idea if your goal is to own your company's stock.
"Financially irresponsible" in terms of the 401(k) plan's custodian's and manager's fiduciary responsibility would be very difficult to prove. Basically, your company can change the plan any way they want, and if this is what they want, then the plan manager is just carrying out their wishes.
~Tim~
Eye Candy : Why Whimsy
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Fri Jun 22, 2007 4:51 pm |
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ostatetulsa
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I get that piece of it. What I am trying to uncover are all of the potential positives and negatives of making such a move.
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Fri Jun 22, 2007 4:56 pm |
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coaster
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Cash: $ 1358.20
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Well, there isn't enough information. It all depends on the terms of the transaction. For example, when does it take place? At what price? When do the proceeds get transferred to your account? Do you get paid interest during the float? What discretion do you have to use the proceeds to purchase an investment for the account? How long do you have to wait to do that? The only tradeoff I can see so far is the fee you're paying and you're not getting company stock (if that's what you want) vs. the funds and the freedom to place them in another investment of your choice at a time of your choice.
~Tim~
Eye Candy : Why Whimsy
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Fri Jun 22, 2007 5:14 pm |
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