A blackout period is a short window when you have limited control over your 401(k) account. This usually happens when 401(k) plan assets and records are moving from one retirement service provider to another. It can also happen when changes are made to the plan’s investment options.
During this time, you may not be able to:
Choose new investments or change existing ones
Take out a loan
Take withdrawals or distributions from your 401(k) funds
This article covers how you will be notified, what to do if you do not want your funds transferred, what happens if your assets transfer as a non-employee, and how to set up your account after the transfer.
Important: Your money stays invested during the blackout period. The restriction applies only to actions you can take on your account — not to how your funds are invested in the market.
When a blackout period happens — like when a 401(k) plan is moving to Gusto Retirement — we send blackout notices to all affected participants. Even if you no longer work for the company sponsoring the 401(k), you will get a blackout notice if you have a balance in the plan.
Here is what to expect from the notice:
Timing: Notices are sent from Gusto Retirement at least 30 days but not more than 60 days before the blackout period starts
Details included: The expected start and end dates, the reason for the blackout, and which account actions will be restricted
If your prior employer is transferring the plan to Gusto Retirement and you do not want your funds transferred, you need to withdraw your assets from the plan before the transfer.
Your options depend on the rules your plan sponsor (the employer that manages the plan) has set. You may be able to request a rollover or distribution of your funds before the blackout period begins. Contact your plan sponsor or prior provider to explore your options.
If your assets transfer to Gusto Retirement and you no longer work for the sponsoring company, a $4-6 per month administrative fee will be taken from your account. This fee begins after a 90-day grace period following the end of the blackout.
Pro tip: To avoid this fee, consider withdrawing your funds from the plan before or shortly after the transfer. Learn more about outbound rollovers.
Once your assets arrive at Gusto Retirement, you can create an account and choose a portfolio. If you do not select a portfolio, your funds will be invested in a default portfolio based on your age and expected retirement date.
You will get an invitation email with a link to set up your new account. Learn more about the Gusto Retirement account setup process.