Fidelity zeroed out my 401k without my permission and now they can't find the money - _Updated TLDR_
General reddit consensus is that unbeknownst to me my crappy little 401k got rolled up in a batch forced distribution scenario. For being under 5k. Irony is that my last statement (July) it was over 5k. (Yes yes it was a small account. I have others.) Then the 401k goes to nil. If it was subject to forced withdrawal, it was probably sent to a place called Millennium Trust, which the internet reports is a nightmare. Fidelity admits they sent me no notice that any distribution or withdrawal would happen or had been triggered to happen (and research finds they are legally obligated to do so, they can’t just tuck it in a contract) they also didn’t know where the money was actually sent but are investigating. I have many questions. And will be speaking to Fidelity again Monday! Have a great weekend all.
TL;DR to avoid some confusion. According to Fidelity, my past employer's retirement program w/ Fidelity is not subject a minimum balance clauses, which I see are common for many kinds of retirement accounts. But because this was not the case for my employer's relationship w/ Fidelity, there are no processes in place for forced minimum balance xfers. As a result I was not informed—no letters, notices, nor a way to direct the distribution perhaps to an account of my choosing. The other result is they don't know where they transferred the money. They did not send me a check. I'll note that my account was under the theoretical cutoff for a very short amount of time due to market fluctuations. Not long enough, according to the Fidelity rep from my employer, to trigger this.
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I got a letter from Fidelity yesterday that my entire 401k balance from my last employer had been withdrawn. I had not initiated a rollover yet, haven't even done paperwork. I left the job 1 year ago and was waiting for my 401k at my new employer to kick in.
Anyway, the letter freaked me out because I did \*not\* initiate a distribution and I certainly got no correspondence about any such thing potentially happening.
Called Fidelity, they were very squirmy, but the facts they relayed are:
1. They applied a minimum balance clause to my retirement account, which they weren't supposed to, and as a result they withdrew the funds and sent them... somewhere. They don't know where. My other retirement account, which has a higher balance, is safe. They say.
2. Because the minimum (5k) clause wasn't supposed to be applied, but they did it anyway, they never sent any correspondence or alerts about an impending distribution. Just the notice it'd been done after they did it.++
1. \++Note here since folks are asking -- I was told by Fidelity that my account, being part of the retirement system for a large university, was supposed to be exempt from this process. Any other accounts at this university would also be exempt -- not just mine.
3. They do not know where my money is. They have opened an "investigation." They guess (!) it is probably en route to an IRA... somewhere. They don't know where, they don't know how, nothing.
4. They suggested that I am not the only one this happened to, due to this minimum balance clause being inappropriately applied. "Uh, yeah this is an issue we need to fix..."
Posting as a warning to folks with less than 5k in their Fidelity retirement accounts to just give them an gander and seeing if anyone else has had this happen to them recently. It's possible some types of retirement accounts do have this clause and the appropriate processes, but they told me mine wasn't supposed to.
Hooray!Personal Finance
Fidelity zeroed out my 401k without my permission and now they can't find the money - _Updated TLDR_ General reddit consensus is that unbeknownst to me my crappy little 401k got rolled up in a batch forced distribution scenario. For being under 5k. Irony is that my last statement (July) it was over 5k. (Yes yes it was a small account. I have others.) Then the 401k goes to nil. If it was subject to forced withdrawal, it was probably sent to a place called Millennium Trust, which the internet reports is a nightmare. Fidelity admits they sent me no notice that any distribution or withdrawal would happen or had been triggered to happen (and research finds they are legally obligated to do so, they can’t just tuck it in a contract) they also didn’t know where the money was actually sent but are investigating. I have many questions. And will be speaking to Fidelity again Monday! Have a great weekend all.
TL;DR to avoid some confusion. According to Fidelity, my past employer's retirement program w/ Fidelity is not subject a minimum balance clauses, which I see are common for many kinds of retirement accounts. But because this was not the case for my employer's relationship w/ Fidelity, there are no processes in place for forced minimum balance xfers. As a result I was not informed—no letters, notices, nor a way to direct the distribution perhaps to an account of my choosing. The other result is they don't know where they transferred the money. They did not send me a check. I'll note that my account was under the theoretical cutoff for a very short amount of time due to market fluctuations. Not long enough, according to the Fidelity rep from my employer, to trigger this. \--
I got a letter from Fidelity yesterday that my entire 401k balance from my last employer had been withdrawn. I had not initiated a rollover yet, haven't even done paperwork. I left the job 1 year ago and was waiting for my 401k at my new employer to kick in.
Anyway, the letter freaked me out because I did \*not\* initiate a distribution and I certainly got no correspondence about any such thing potentially happening.
Called Fidelity, they were very squirmy, but the facts they relayed are:
1. They applied a minimum balance clause to my retirement account, which they weren't supposed to, and as a result they withdrew the funds and sent them... somewhere. They don't know where. My other retirement account, which has a higher balance, is safe. They say. 2. Because the minimum (5k) clause wasn't supposed to be applied, but they did it anyway, they never sent any correspondence or alerts about an impending distribution. Just the notice it'd been done after they did it.++ 1. \++Note here since folks are asking -- I was told by Fidelity that my account, being part of the retirement system for a large university, was supposed to be exempt from this process. Any other accounts at this university would also be exempt -- not just mine. 3. They do not know where my money is. They have opened an "investigation." They guess (!) it is probably en route to an IRA... somewhere. They don't know where, they don't know how, nothing. 4. They suggested that I am not the only one this happened to, due to this minimum balance clause being inappropriately applied. "Uh, yeah this is an issue we need to fix..."
Posting as a warning to folks with less than 5k in their Fidelity retirement accounts to just give them an gander and seeing if anyone else has had this happen to them recently. It's possible some types of retirement accounts do have this clause and the appropriate processes, but they told me mine wasn't supposed to.
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