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Ruth2000

Investment Company Going Under

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The investment company my municipal employer uses for its 457 plan is in financial trouble. (I work for a City that uses Hartford Financial Services to run its 457 plan.) I have a number of questions related to that--I don't know what my options are:

 

--How safe is my money? It's not federally guaranteed?

 

--Can I take all of my money out if I'm not switching employers, leaving the job, or retiring?

 

--Can I roll over all of it into an individual 401K or Roth with some other company?

 

Please help. I don't know what I can or should do, with $40K invested so far.

 

Thank you

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Hi Ruth,

We are in a similar situation. We have AIG. However, our 457 money is safe for a three reasons, first it’s our employer that owns the assets, not AIG. Second, AIG is the third party administrator with our money in various mutual funds such as VG, American funds, Dryefus and third, the insurance section of AIG is not the part that is in trouble and like Hartford, it looks like it would be bought up by another company.

 

In your situation, in order to answer your question as accurately as possible, is your money in a Hartford’s own proprietary fund or is it similar to our 457 in which the money is in various mutual funds?

Ask your employer. You have a right to know.

 

Steve

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The investment company my municipal employer uses for its 457 plan is in financial trouble. (I work for a City that uses Hartford Financial Services to run its 457 plan.) I have a number of questions related to that--I don't know what my options are:

 

--How safe is my money? It's not federally guaranteed?

 

--Can I take all of my money out if I'm not switching employers, leaving the job, or retiring?

 

--Can I roll over all of it into an individual 401K or Roth with some other company?

 

Please help. I don't know what I can or should do, with $40K invested so far.

 

Thank you

 

 

Your money will only be federaly guaranteed if a CD is an investment option under the plan. Insurance/annuity policies are guaranteed by state guarantee funds in the event of default by the insurance company but each state fund is different. Hartford is considering selling its annuity and life insurance business to Sun Life Financial. Are your funds invested in a Hartford annuity?

 

You can only withdraw funds before termination if you have an unforeseeable emergency or, if your plan permits, you can borrow up to $50,000.

 

You can rollover the distribution to any other employer sponsored retirement plan 403b plan or another 457b plan.

 

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