Accountancy Resources
Occasionally, I have had people inquire to me about what happens when their company changes 401k providers. Usually, when such an event occurs, there is a lot of confusion and uncertainty about what is going to happen with their money. To prevent you from making any ill-advised decisions, please read more.
First, I’d like to give some reassurance that just because your company is changing 401k providers it is not necessarily a bad thing. Depending on your current investment selections, your new 401k may have better options, could be less costly to you, and you may get better service than you did with your previous provider.
Obviously, everything I just stated could be the exact opposite, so you never know what could happen.
You have just received the change notice and you’re scared out of your mind because you have no idea what it all means, take a breath. Okay, realize that you don’t have to do anything. Whatever your investment selection was in the current plan should convert over to the new plan. For example, if you were in a balanced model that had you 60% stock and 40% bonds, you should be in the same type model in the new plan, just with different options. This conversion period is what they call the black-out period which means you won’t be able to make any changes to your 401k allocations. So if you want to convert it all to money market because you think the market is going to tank, do it now before it’s too late. And if you have some sixth sense of know that this is going to occur, please share with the rest of us so we can follow suit.
But as an employee, you do have a few choices on what you can do.
Name
Website
Message