This information is from the link on the Heller Ehrman external website which did not work for some readers. Some very good news – there are no termination fees to be assessed to the account holders.
Action Required: 401(k) Retirement Savings and Profit Sharing Plan Closing
Dear Plan Participant:
We made you aware earlier this month that the Heller Ehrman LLP 401(k) Plan Retirement Savings & Profit Sharing Plan was frozen to distributions. We are happy to inform you by this letter that the freeze will lift effective October 31, 2008. See “Your Next Steps” section below for how to request a distribution. You should arrange to take a distribution from the plan immediately. You must take a distribution from the plan by November 30, 2008.
You must decide by November 30, 2008, what to do with savings you have accumulated in the plan. This letter outlines the actions you can now take on your account, and provides important information about your distributions options.
Please review your choices carefully. You should also review the enclosed Special Tax Notice to determine the tax impact of the distribution option you choose. Then follow “Your Next Steps” as described near the end of this letter to implement the option you choose. Remember: If you have an outstanding loan, you must repay it in full to avoid taxes on the balance due. See the section of this letter entitled “Your Plan Loan.”
Until you request a distribution, you can continue to direct your investments in the normal way.
Your Distribution Options
Directly roll over your money to:
- Another employer’s eligible plan. If the plan permits, you can roll over your plan balance to another employer’s eligible plan. This option will enable you to keep your money tax-deferred.
- A traditional IRA. You can roll over pretax assets to a traditional IRA. This option will enable you to keep your money tax-deferred.
- Take your savings in cash as a lump sum. This choice has significant tax implications. Distributions from pre-tax accounts are generally subject to ordinary income taxes and usually a 10% federal penalty tax if you are under age 59½. If you terminated employment with Heller Ehrman in the year you were age 55 or more, the 10% federal penalty tax does not apply to you. The IRS requires that 20% of your distribution be withheld for taxes, though your actual tax liability on the distribution may be more or less than 20%. You should consult your tax advisor regarding the tax implications of electing a lump sum distribution and to determine if you qualify for any of the exemptions from the 10% penalty tax.
- If you do not make an election by November 30, 2008, your balance will be automatically rolled over to a Vanguard IRA® and invested in Vanguard Prime Money Market Fund. (Please review the enclosed fund fact sheet for more details on this fund.) After your Vanguard IRA is established, you can transfer the assets to an IRA at another financial institution or roll them over to another employer’s eligible plan (if the plan permits).
Plan termination note: Please be aware that the Plan has determined that no plan termination fees will be assessed against participant accounts.
Your Plan Loan
You must repay any outstanding loan balance you have with the plan by the date of your distribution or November 30, 2008, whichever comes first.
If you do not repay the loan by 4 p.m., Eastern time, on November 30, 2008, the unpaid balance will be reported to the IRS as a distribution. Consequently, the taxable portion of this distribution, if any, will be subject to ordinary income taxes and, if you are under age 59½, usually a 10% federal penalty tax. You cannot directly roll over an outstanding loan balance.
To pay off your outstanding loan, download the Loan Payoff form from the 401(k) Plan website (http://hewm.vanguard-education.com/ekit/) or the Heller Ehrman website (http://www.hellerehrman.com). Then call a Vanguard Participant Services associate at 800_523-1188 to determine the loan payoff amount and obtain further instructions. Vanguard will not accept personal checks for loan payoffs.
Additional Vanguard Services
Vanguard is much more than a retirement plan provider. We offer brokerage services, financial planning, and more. As you weigh your distribution options and investment decisions, you may want to consider using one or more of these services.
Your Next Steps
To request a direct rollover or a lump-sum distribution, simply log on to your account at Vanguard.com or call a Vanguard Participant Services associate at 800-523-1188. To request a final distribution online, you must be a registered user of Vanguard.com. To register for immediate online account access, you’ll need your plan number (093738). Note: You will not be able to request a distribution for seven days after you register for online account access.
Call Vanguard Participant Services at 800-523-1188 Monday through Friday from 8:30 a.m. to 9 p.m., Eastern time.
Best wishes in your future endeavors.