Each year, an average of 1,650 sponsors of 401(k) plans abandon their plans, often because the employer goes out of business or merges with another. When that happened, the U.S. Labor Department typically petitioned the courts to take control of the plan and distribute the 401(k) assets to employees.
But new Labor Department rules streamline that process and allow employees to access their 401(k) funds sooner. The new rules, which took effect May 21, allow financial institutions to distribute those assets and wind down the plans without going to court.
Read a fact sheet on the new rules at www.dol.gov/ebsa/newsroom/fsabandonedplan.html.