I am no longer a member of the NFLPA (which is the Union that represents players) and no longer employed by an NFL club, I'm wondering if its legal for my former Union to not allow me the ability to take a loan against my 401k for the specific purpose of capital to expand my company, even though I am no longer a member of the union.
In this case your union status may be irrelevant. Read the 401(k) summary plan description to find out when you are allowed to take out a loan. Assuming your 401(k) plan permits loans (some do and some don't) you may not be permitted to take one to fund your business. If you don't have a copy of the summary plan description, just make a written request and it will be sent to you.
In addition to Mr. Janich's advice, you may consider rolling your 401k out of the union altogether and into an individual IRA that you control. It is fairly easy to research a fund at, for example, Sharebuilder and they can walk you through the process. If you are no longer associated with NFLPA or nor employed by the NFL, you may prefer to not have to contact them again when it comes to your retirement account. (Unless, of course, there is something contractual involved that keeps the NFL contributing to your retirement even while you are not actively employed.)
No attorney-client relationship is created by the answers provided here and all answers are of a general nature.
The ability to borrow against a qualified tax deferred account depends on how the plan was structured. As others have mentioned, some plans allow borrowing, others don't. Since you are no longer employed by the NFL, you can easily roll your account into an IRA. For example Fidelity, Morgan Stanley, Vanguard, to name a few, have very easy approach to rolling a 401k into a traditional IRA or Roth IRA. Taking funds out is expensive as the distribution is taxable income and subject to a 10% penalty. If you are "in" for a little more trouble, create a 401k for your company. Depending on your situation, this will take some expertise, have increased reporting requirements and expense. The plan will have to meet IRS regulations to be a "qualified plan". Borrowing is subject to some strict requirements monitored by a plan administrator.
A communication through this web site does not create an attorney client relationship. The Avvo site is for general information, and is not intended to be legal advice applicable to your situation.
Our Rating is calculated using information the lawyer has included on their profile in addition to the information we collect from state bar associations and other organizations that license legal professionals. Attorneys who claim their profiles and provide Avvo with more information tend to have a higher rating than those who do not.What determines Avvo Rating?Experience & background
Years licensed, work experience, educationLegal community recognition
Peer endorsements, associations, awardsLegal thought leadership
Publications, speaking engagementsDiscipline