401K advice

[FallRiverGuy]

My past employer extended the vesting time period for the company plan after my employment terminated. I am now being told that even though I was not employed at the time, the new changes affect my upcoming distribution. Anyone know if this is correct, or should I be talking to someone about this? PMs welcome.

[Catching Nemo]

I asked my wife, about this, as she is a HR Executive.

She responded that companies can do this but usually, out of goodwill, they will grandfather existing employees or those that have just left. However, they are not required to do so. This also happens quite frequently, with retiree's, and their benefits being changed/reduced.

It sounds like the company might be having financial problems and is restructuring to decrease their liabilities. Are they selling the company? I would keep tabs on what they do and make sure they don't change back to the prior vesting schedule in a few months/year.

If you have more than $5K in the account, they can not force you out of the 401K. As a result, if they revert back to the old vesting schedule - you could then get your money. Just remember, a vesting schedule is "years of employment" and not years of participation in a 401K.

It would be worthwhile to still consult an Employment Attorney but it is doubtful you have any recourse. Unless, it can be shown that this was specifically targeted and/or only effects you. If you signed a "Separation Agreement", make sure to take that to the attorney as well.

Let me know if you want to talk to my wife. Although it won't be "legal advice", she is extremely competent in her field and could at least answer some of your questions.



Sorry about the news,
John

[Hare's Ear]

I'm pretty sure that this change can only be made prospectively. In other words, the employer can change a vesting schedule moving forward, but can't retroactively change vesting. Look at the last participant statement you received. The vesting percentage shown on that statement is the one that I would push to have apply.

[matttheduck]

what about rolling the money out of there and into a self-directed account? if, that is, you have some grace period where you can get it out.

[wootersen]

I suggest you put a phone call into Snug 2. Andrew is a wealth of information and he's always willing to help out an ifisher.

[Geemo]

Give Snug2 a jingle. In fact I know he's in his office today. I just finished talking with him a couple of minutes ago. He's been a great source of information for us.

Good luck
geemo

[FallRiverGuy]

Thanks for all the input. I have been in contact with Snug2.