Touch america holdings liquidating trust
Employees must get in line with other creditors for the return of this money.David Wray, president of the Profit Sharing/401k Council of America, said his organization is urging Congress to recharacterize this money as unpaid salary, since it came out of workers' paychecks.A business that files Chapter 7 bankruptcy intends to close its doors. In this case, the employer stops operating and no longer serves as plan fiduciary.The plan also stops operating and all assets need to be distributed to former employees.When the termination is approved, all employees become fully vested, said Stephen Mueller, president of Hand Benefits & Trust of Houston, and money is distributed to plan participants.
That said, there are two circumstances in which you may not receive all the money you thought was due you.
If the employer files for a plan termination (a formal process that is not required) it could take six months or more to get IRS approval.
During this time employees may not make contributions to or withdrawals from the plan.
The first is if your employer didn't deposit your contributions before declaring bankruptcy.
Typically, this should only affect one paycheck's worth of contributions, since Department of Labor rules require that all employee contributions must be deposited in the trust as soon as possible, and at the extreme no later than 15 business days following the end of the month when the contributions were made.It seems that every week brings fresh bankruptcy declarations.