Originally Posted By: Cutehumor
Interesting article. Since the recession, certain companies, are not allowing individuals to withdrawal their 401k savings. They are saying it is hurting their "collateral" one fund says that all of their holdings are into property and droves of people are requesting liquidating, which represents 26% of their assests. So they cannot allow it. They locked everyone from withdrawing from their 401k funds. is that even legal??
http://articles.moneycentral.msn.com/Inv...ash.aspx?page=1
I would say this is a poorly written MSN article. Or maybe it's your word choice in your post. It's not the employers nor the 401K administrators putting the hold on withdrawals. It's the fund companies themselves.
Quote:
When Ed Dursky was laid off from his job at a manufacturing company in March, he couldn't withdraw $40,000 from his 401(k) retirement account invested in the Principal U.S. Property Separate Account.
That fund, which invests directly in office buildings and other properties, had stopped allowing most investors to make withdrawals last fall as many of its holdings became hard to sell.
It's not illegal for funds to do this (it would be if the employer tried this stunt). Read the Prospectus fellows. In these case it looks like no one can cash out of some of these cheesy funds, not just 401K holders.