Vestwell will receive data regarding your employment status from your employer. Typically, this information is obtained on the payroll after you leave your company. Your portal will be updated at that time, and you will be given options to either distribute your total account balance or roll over your balance to another retirement account. If we do not receive your termination date from your employer, you will not be allowed to process a distribution or rollover of funds from your account. Depending on your account balance, you may have a time limit on when to take action on your account following your termination.
- If the account balance is under $7,000, the balances will be forced out quarterly. Your account balance will be taxed as a distribution if you do not roll it into an existing plan or IRA.
- If the account balance is $7,000 or more, your account cannot be forced out.
- If your balance is under a certain threshold, the fees to distribute the funds outweigh the account balance; therefore, these accounts are zeroed out.
To read more about Force Out distributions, please see our article: "What Is a Force Out Distribution?"
Once you decide how to proceed with your account, you can request the transaction directly from your Vestwell portal. If you need help, please follow the steps in the article below.
If you have an outstanding loan, you must pay back the loan in full before your next tax return filing date. If you fail to do so, the unpaid balance will be treated as a distribution, meaning you will likely owe taxes on the amount, plus a 10% penalty if you are 59 or younger.
When you request a distribution or rollover, your outstanding loan balance will be paid back in full using the existing funds in your account, and you will receive the difference. Alternatively, you can repay the loan in total operating funds outside your 401k account. Depending on your account type, this can be done directly through your portal, or you will need to request repayment instructions from our team.
Please download our retirement funds guide for former employees below:
If you need assistance with this, don't hesitate to get in touch with firstname.lastname@example.org.