I need to cash out my 401k because of maternity leave but then I have to terminate my employment. Why? Any law

The handbook for my 401k does not talk about rehiring anywhere but when i spoke to the lady who holds the account, she says that I have to terminate my employment. Is there any law that states taht I can not get rehired after 3 months?

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4 Responses to “I need to cash out my 401k because of maternity leave but then I have to terminate my employment. Why? Any law”

  1. digdowndeepnseattle Says:

    It’s the law that says you can’t take an inservice (still employed) distribution unless your age 59 1/2 or in a hardship situation. For the majority of plans, pregnancy is not a recognized hardship situation. Maternity leave is not termination from service which is why you would fall under need for hardship withdrawal. So that’s why they said you would have to quit.

    there is no law that prevents you from being rehired in 2 days let alone 3 months. That’s up to your employer. Hopefully you’re on great terms with them because if you quit then they aren’t required to hold your job for you as they are if you’re out on maternity leave. You lose all FMLA rights….tread with care!

  2. Michelle C Says:

    I have never heard of anyone being forced to terminate emplyment for cashing out a 401k. Did you try maybe just taking out a loan from it? Or are they making you quit beause your maternity leave is up and youa ren’t going back? Before I do anything I would call the labor board and see what they say. You shouldn’t have to loose your job because you want to take money out of your 401K!

  3. Tommy Says:

    Ask for loan from your 401K account.
    Some compnaies don’t allow that.
    If they don’t allow loan then it is difficult to cash out without leaving the company.

  4. Rebekah is expecting #2 in Nov. Says:

    You are being told false info, you do not have to quit to cash out your 401k, I would call the company that handles the 401k to get the real story.