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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Employment Law
Satisfied Customers: 110488
Experience:  20+ Years of Employment Law Experience
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May 4, 2016 Office of the State Treasurer Unclaimed Property

Customer Question

May 4, 2016 Office of the State Treasurer Unclaimed Property Division P. O. Box 19495 Springfield, Illinois To Whom It May Concern: As an Insurance broker I have established a 401K plan for a business located in Chicago Illinois.
The business owner is requesting termination of the 401K plan. My questions is I was informed by the insurance company servicing the 401K plan that upon termination ALL vested employees will receive the vested funds. However, there are several terminated employees that cannot be located!
I was informed by the insurance company servicing the 401K plan that an attempt by the business MUST be initiated to locate those terminated vested employees. If they cannot locate the terminated employees there vested portion of the 401K funds will be directed to the State of Illinois as unclaimed property.
Questions Can at a certain time the business owner who contributed (100%) on behalf of the terminated vested employees recover those funds and distribute to the remaining employees proportionally? The business owner has stated that these employees may have provided erroneous social security numbers and have left the United States.
It is vital to obtain an immediate reply to this issue to allow the employee to comply with all regulations to avoid any future or current fines!! Sincerely,
Submitted: 5 months ago.
Category: Employment Law
Expert:  Law Educator, Esq. replied 5 months ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Any funds that have VESTED in the plan even if it was from 100% contributions of the employer, must go to that employee or be surrendered to the state as unclaimed funds. The employer can only recover the funds from the plan that had not vested, since the employer paid 100% of those contributions. Vested means that they now belong to that employee and as such the insurance company is correct.
Customer: replied 5 months ago.

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