The company I work for is in the process of changing 401K plan administrators. On 10/12/01 all employee 401K assets were frozen to make the transition. As of 12/28/01, we have still not been granted access to our accounts to make any fund changes. What is the maximum time limit that 401K plan participants can be legally "locked out"?

Well, for now, there really is no "legal" maximum - its a matter of what is necessary, and whether the selection of a vendor that can't do a timely conversion was prudent. The typical blackout starts a few days to a few weeks BEFORE the stated asset transfer date (as the current recordkeeper/trustee needs to let the accounts settle), and then runs to 4-15 business days after the receipt of GOOD records from the prior recordkeeper (which can be up to a month after the asset transfer date). Current industry practice is for the blackout period to average around 4-5 weeks. Ask what the holdup is. If there are problems in records (dirty data) it can take a while to convert the plan, BUT those things should have been discovered and correct PRIOR to the plan going into blackout.

Unless your company is in the Fortune 1,000, say a million thanks if the blackout lasts less than 3 months. Not to say that it doesn't happen, but it certainly cannot be expected, no matter what assurances were given by your employer or the plan recordkeeper.

Best to be pessimistic about these things!

I disagree, Dook. I work for a mid-sized bundled 401(k) service provider, and last year our average turnaround time was 4-6 days after receipt of good data, and total blackouts averaged 4-5 weeks (TOTAL). Not one fortune 1000 company in the bunch. I think we are on the short side of normal, but not by much. In the wake of Enron, these numbers are becoming more important.

Typically, the biggest factor in the timing of the transition would be: is the plan coming from daily recordkeeping and going to daily recordkeeping, or is it coming from balance forward recordkeeping and going to daily recordkeeping? If you are coming from balance forward recordkeeping, then I agree with Dook that it could take at least a few months. But if you are coming from daily and going to daily, a few weeks is more likely.