I currently have a 401(k) plan from my employer at Institution A. I also have a rollover IRA at Institution A (with funds from prior employers' plans).

My employer has been acquired, and have announced the termination of that plan (but have not yet moved the funds). Our pre-tax contributions are now going into a new 401(k) at Institution B, within the new parent company's existing plan.

Before the blackout date hits, I am considering rolling over the funds from the 401(k) at Institution A into the rollover IRA at Institution A. Otherwise, those investments will be frozen for about a month and transferred into the new 401(k) at Institution B.

There are a few reasons I'm considering it, one being prior history with the two institutions.

Is there anything preventing me from rolling over while still working for the sponsoring employer? Are there any concerns, e.g. for taxation?

I realize this question may be a duplicate:

My company is changing 401(k) plan providers. Can I rollover to an IRA during the transition?

I see at least two differences:

  • That question is 12 years old. Tax laws change.
  • This is not merely a change of plan administrator. My plan at Institution A is being terminated.
  • 2
    Has your employer given you this option of rolling over to an IRA, or is this an idea you had on your own? You may not be allowed to do this.
    – Ben Miller
    Jan 29 at 15:22
  • @BenMiller It's my own idea.
    – Theodore
    Jan 29 at 16:12

1 Answer 1


I don't believe laws have changed in that regard. However, if you got a notice of plan termination, it should also include options for distribution. If a distribution directly to you or based on your instructions is allowed then yes, you can perform either an indirect or direct rollover. While usually in-service distributions are not allowed except for certain circumstances, plan termination may be one such circumstance. Alternatively their asset distributions may be only to the new plan, in which case you can't do this.

See here:

The IRS considers a 401(k) plan terminated only if:


All assets are distributed as soon as administratively feasible, generally within one year after the date of plan termination

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