TO ALL 401(k), 403(b), Governmental 457(b) and pension plan participants facing separation from their employer due to mergers, company purchases, retirement, or termination for any reason.

Your termination, or a plan termination, triggers options for you regarding your current retirement plan(s).

You need to know and understand your options regarding your current retirement plan. While there are many options, there are three we want to make sure you thoroughly understand.

You can stay with your Current Employer’s Plan Provider:

The company providing your current employer’s plan may aggressively encourage you to keep your plan assets with them by rolling over your current plan to an IRA under their umbrella.

You may be able move your assets to your Future Employer’s Plan Provider (if applicable):

Assuming you will be moving to a new employer due to a merger, purchase by another company, or job change, the provider of your future employer’s plan may encourage you to move your assets to the new plan by the same technique, which is to roll over your existing assets to the new plan provider.

If properly executed, both methods will avoid current taxation, which is important.

Your Third Option:

You also have an option to roll your retirement plan assets over to an IRA not managed by your existing or new employer’s plan providers.

Why is this important?

It may not be a big issue for many younger participants, but it can be extremely important for individuals who are in the second half of their working life.

As we accumulate assets in retirement plans, we are amazed at how large the accounts can grow. For those starting to think more about their retirement years, or who have successfully set aside and grown significant assets, protecting those assets from market fluctuations and softening risk exposure is important.

Most of your investment choices under options one and two above limit your investment options to a small number of mutual fund selections.

This grouping of funds is called a platform. Most platforms have five to 50 funds for participants to choose from. There are over 25,000 mutual funds in the market. These platforms also prevent access to individual stocks, bonds, preferred stocks, and other investments which can be purchased in an individually-owned IRA.

Your individual situation, and not a platform, should dictate what investment options you need to have available. Using a platform that limits your access to a broad range of mutual funds may be detrimental. Not having access to individual bonds, equities, preferred stocks, and other investments may be detrimental.

We are not suggesting you avoid participating in your new employer’s plan. Instead, we suggest you have an opportunity to move your current investments out of a limited platform retirement plan to an independent IRA. This will provide you with a larger set of tools to help you reduce the risks in your portfolio and to better meet your retirement goals.

For more information about your retirement plan choices please feel free to contact me at or by phone at 205-967-4200.

Mark McGarvey, CFP®
Meld Financial, Inc.