USA Transfer 401k Account?

[Tyson]

Hello everyone. Nice to meet you. I will probably be participating in this forum from here forward. I have a question pertaining to 401k.

I recently took over managing the accounts and payroll of a small company. This company recently had to get a new EIN number from the IRS (long story, I can share if needed). Our payroll servicer (Paychex) set up a new company account for us using the new EIN number (The company is exactly the same, same owners, same employees, just a different EIN number). However, they did not transfer our 401k plan over. I called them about this and they said I needed to ask our CPA whether we should have our 401k account transferred over or if we should cancel our 401k account and set up a new one for the new company.

What should we do? How does this work? What are the ramifications of the different options?

 

[bradgilliatt]

Thats a tough one....why was the new ein needed? 401K info is shared with the irs on form 5500 and is filed under an ein number....while not certain, i would believe the old account would need to be liquidated and the participants would have to file forms to roll the balance over into the new plan. This is just a guess....

 

[Becky]

Hello everyone. Nice to meet you. I will probably be participating in this forum from here forward.

Welcome aboard!

 

[Tyson]

Thank you for the reply!

Regarding the EIN number: When the owner made the company he wanted it to be a corporation. The company had been operating as a corporation and telling everyone it was a corporation but was actually using the owner's sole proprietorship EIN that he had been given for a different business he opened back in the 1980s.

So basically we are working on incorporating and are having lots of headaches changing everything over to the new EIN. The biggest one being that we have to re-apply for our state licenses. If this had happened six months later when we were spread out to even more states I imagine it would have been much more difficult.

Regarding the 401k: We eventually got in contact with a support manager who told us he only needed a note and a voided check to transfer our 401k over. I was on the phone and e-mailing people all day trying to figure this out and it ended up being this simple. Maybe it will be complicated for him though. I don't know what he has to do.

 

[bradgilliatt]

I would be very cautious...

 

[bradgilliatt]

Support manager for paychex or your plan holder?

 

[Tyson]

Both. We contacted our plan holder, who got us in touch with the support manager.