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Windfall awaits Delphi workersPosted by Randy on: 2005-10-01 18:31:13 in category:
Retirement Headlines [ Print | Permalink / 0 Comment(s) ] Windfall awaits Delphi workers Delphi workers who once worked for General Motors and hold GM stock in their 401(k)s could get a windfall in their retirement fund if they do not procrastinate. They only have until 4 p.m. Oct. 12 -- 11 days from now -- to call (888) 633-2648. That's the toll-free number at the Fidelity Benefits Center, where an accounting snafu could work in the employees' favor. Fidelity, which manages the Delphi Personal Saving Plan, mailed letters to affected Delphi workers last month. But the explanation contained lots of fine print. Don't let that stop you from acting, warns investment adviser David Kudla of Mainstay Capital Management in Grand Blanc, who is helping some workers. "If you received a letter from Delphi, you should call that toll-free number," Kudla said. "They can provide you an estimate of what your credit or debit would be. "Almost everyone will have a credit." The problem is that when Delphi was spun off from parent company GM in 1999, the system for handling GM stock dividends earned by Delphi workers' 401(k)s changed, too. Or, at least that was supposed to change. Before 1999, when Delphi workers still were with GM, they could have the dividends reinvested automatically to buy more of the automaker's stock. But when they became Delphi workers, GM dividends were not supposed to be reinvested. Instead, they were slated to go into the Promark Income Fund. From 2000 to 2003, the system continued under the old routine, automatically buying more GM stock for Delphi workers. An audit of the Delphi plan in March 2004 uncovered the problem. In the meantime, GM stock took a dive while the Promark Income Fund flourished. Now, workers have to tell their fund manager, Fidelity, what to do with those GM shares erroneously acquired through dividend reinvestment. They have two choices: Do nothing, and keep those new GM shares acquired between 2000 and March 2004, or Sell those shares to buy into the Promark fund. If they do, the employee gets paid the difference between the value of the acquired GM shares and the fund value had Fidelity properly put that money into the 401(k) over four years' time. The dollar difference could be substantial, Kudla said. "I have a client who has an estimated $3,664 credit coming," he said. "People have to 'opt-in' to get that credit. It's like found money." Homepage Other open community sites http://www.business-business.biz Please support are sponsors. To design you custom retirement plan. http://www.retirement-plan.us For planning a IRA rollovers. http://www.ira-rollover.us Professional asset allocation and the wonders it can do. http://www.asset-allocation.us Professional money management: National ranked performance. http://www.roth-ira.us Managers selected to fit your needs. http://www.money-managers.us |
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