u/PretendBar7972

Thanks in advance for anyone willing to read and assist in this.

So I have an old 401k plan from a job several years ago that I have ~$4500 vested in ($7554 unvested due to leaving before full period). I don't know all the details about it and not sure if it's even relevant, but the 401k plan was operated through a local insurance agency that also has a CPA as one of the co-owners. Long story short they've always been cagey and difficult to connect with, no online portal, etc. etc. They've reached out saying that "federal law requires us to release your vested benefits form the plan" or else it may be transferred into a missing participant IRA. I'm guessing this is because it's under the $7000 threshold. All that said, happy to move it out and be done with them.

My question begins with what should I do with this money?

I make above the limit to contribute to a ROTH IRA, but I do perform backdoor ROTH IRA conversions each year with Fidelity. So rolling this money over into a rollover IRA with fidelity is an option of course; however, how does that affect the pro rata rule with future conversions/simply maintaining that money in the rollover IRA given that it is pre-tax money?

I also have a different, active 401k with Fidelity - Fidelity states that it "depends on your plan" if you're able to roll that money into the active 401k plan without a tax-able event, but nowhere on the site is able to give me details on if my plan qualifies for this. Anyone have experience with this?

If I'm not able to roll it into a new plan and if creating a rollover IRA with it would lead to problems with my ROTH IRA, does it make sense to simply cash it out and take the tax hit on it given that it's a smaller dollar amount?