Your First American 401(k) can remain in the plan, transfer to a new employer’s plan, roll to an IRA, or be cashed out at the cost of income tax and usually a penalty under 59½. Two local wrinkles: First American is publicly traded, so any company shares inside your plan raise the NUA screen before a rollover; and industry layoff cycles mean many departures here are unplanned, which makes not rushing the money decision even more important.
A Santa Ana institution tied to the housing cycle
First American has been rooted in Santa Ana for more than a century, and its title, escrow, data and settlement-services businesses employ underwriters, escrow officers, technologists and corporate staff across Orange County. The industry’s fortunes track mortgage volume, so hiring and reductions arrive in waves with the rate cycle.
The plan's Form 5500 filing for 2024 (public at efast.dol.gov) lists the First American Financial Corporation 401(k) Savings Plan; Fidelity is listed as recordkeeper.
Your four options
Nothing in a layoff changes this menu — it only changes the temptation to grab the worst item on it.
| Option | Good when | Watch out for |
|---|---|---|
| Leave it | Fees are institutional-class and the lineup suits how you invest | Balances under the plan’s cash-out threshold can be involuntarily distributed |
| Roll to new employer | Consolidation matters to you and the receiving plan is well run | You inherit whatever menu and pricing the new employer chose |
| Roll to an IRA | You value flexibility and a full universe of investments | Pre-tax IRA money can snarl the pro-rata math on a later backdoor Roth |
| Cash out | True hardship and every alternative is exhausted | Tax plus an early-distribution penalty before 59½ — and decades of growth surrendered |
Things to check in your specific First American plan
Plan facts on this page come from the plan's public Form 5500 filing for 2024; plans change, so confirm with your current statement.
- Company stock inside the plan. The plan's Form 5500 filing for 2024 (public at efast.dol.gov) lists the First American Financial Corporation 401(k) Savings Plan; the plan master trust held First American stock at the end of 2024.
- The recordkeeper and distribution forms. The plan's Form 5500 filing for 2024 (public at efast.dol.gov) lists the First American Financial Corporation 401(k) Savings Plan; Fidelity is listed as recordkeeper.
- Vesting as of your separation date. In a reduction, the difference between your vested and total balance is worth confirming in writing immediately.
- Severance’s effect on nothing. Severance is wages, not plan money — it neither extends vesting nor changes your options. Budget with it; do not let it substitute for a cash-out.
- Loan repayment timing. Your SPD and HR explain any loan repayment options after separation.
- Roth and after-tax money. Each needs its matching destination in any rollover; a single commingled transfer can waste their advantages.
Laid off with a 401(k): the sequence that protects you
First, stabilise cash flow from severance, unemployment insurance and savings — not from the plan. Second, confirm your vested balance, any loan deadline, and whether your balance is small enough for the plan to force out. Third, decide the rollover on its merits once the next job is clearer; a balance rolled thoughtfully in month three beats one cashed out in week one by decades of compounding. If the gap stretches and the plan money starts to look like groceries, price every alternative first — the combined tax and penalty on an early cash-out routinely consumes a third of the withdrawal.
Always transfer directly. Whichever option wins, execute it as a direct rollover between institutions. IRC § 3405(c) compels 20% withholding on any distribution cheque made out to you, and a completed 60-day rollover then depends on replacing that fifth with money you may not have handy mid-layoff.
Common questions
I was laid off and my balance includes First American stock. What order do I do things in?
Confirm the stock position and its cost basis first, because the NUA election dies the moment those shares roll into an IRA. Then decide the destination for the rest. Nothing about a layoff rushes this — the analysis costs a week and can be worth years of the stock’s tax difference.
Can the plan force my account out while I am job-hunting?
Only small balances — federal law lets plans cash out or auto-roll accounts below a threshold (up to $7,000 under current law). Above that, the money can generally sit while you decide. If yours is small, decide before the plan’s administrator does.
Is there a fee for the rollover review?
No. The review is complimentary and carries no obligation. We are paid only by clients who choose ongoing management, at the asset-based rate on our fees page. Nobody else pays us, which is why the advice can include “leave it where it is.”
Cycle-proof the one asset the cycle cannot touch
Layoff or new offer, bring the statement — we will sequence the stock question, the loan deadline and the rollover so nothing is lost to haste.