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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 112677
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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Im enrolled in a profit sharing plan at my job in Georgia

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I'm enrolled in a profit sharing plan at my job in Georgia where I've worked 20 years. I am considering resigning because of a hostile work environment this past year that is causing me too much stress and effecting my health. My employer deposits the profit share into a Merrill Lynch IRA account for me once a year. When I resign I need some of the money by the end of the year. I don't see anything in the client enrollment documentation that says I have to wait a certain amount of time to get a payout from my IRA.

The person that has been giving me trouble at work is the same person who is the office manager and responsible for payroll and notifying Merrill Lynch that I no longer work there. Does the company have to notify Merrill Lynch within a certain amount of time or can they take as long as they want and delay my request for payout?
Thank you for your question. I look forward to working with you to provide you the information you are seeking.

First of all, if you are vested in the plan, you cannot collect or make a withdrawal from the IRA without substantial IRS penalty until you actually qualify for collecting under the plan terms. Second, a vested employee cannot just take money from a profit sharing IRA retirement plan when they quit, they have to actually be qualified under the terms of that plan to collect under the terms of the plan and in that case you can only collect as the plan description provides.

Thus, as you are vested, you cannot just withdraw from the plan and you need to check the plan description about early withdrawal which can have a tax penalty of up to 40%, so it might not even be a wise decision to take the money even if you can get it out.




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Customer: replied 3 years ago.

Thank you. However, my question wasn't answered. I understand about the penalties and that's okay as I would roll over the greater portion. Nothing in my paperwork (Enrollment Documentation For Individual and Joint Clients) says there is a waiting period for me to get the money.


 


My original questions follows -


 


"The person that has been giving me trouble at work is the same person who is the office manager and responsible for payroll and notifying Merrill Lynch that I no longer work there. Does the company have to notify Merrill Lynch within a certain amount of time or can they take as long as they want and delay my request for payout?"

Thank you for your response.

The answer is that unless your plan description states you can make an early withdrawal you cannot do so. However, if the plan provides for early withdrawal and do not provide for only making withdrawal during limited times of the year, then they have 30 days from when you make the request to make the payment to you.
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