Can an employer refuse to pay employer portion of 401k contrbutions to an employee that has been fired if that employee was 100% vested at the time of termination.
2007-04-25 14:48:40 · 5 answers · asked by leo874m 1 in Business & Finance ➔ Other - Business & Finance
Old saying "the devil is in the details"
Means the rules are spelled out and if there is a termination ,
Then what portions are fully vested is spelled out .
Read the paperwork , what does it say about contributions and % relevant to years on the job etc ?
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2007-04-25 15:00:23 · answer #1 · answered by kate 7 · 0⤊ 0⤋
No, in fact, the trustees of the plan (typically the owner of the company and his family) have personal liability in making sure the plan is run according to law. The law says that when someone quits, gets laid off, gets fired or separates from service in any other way...they can get a distribution.
Simply request distribution paperwork fill it out and turn it in. I would send everything return receipt requested so they can't say "I didn't get it". Then if you have a statement that shows you were 100% vested and you know you were (ie you worked there long enough and have support to prove it...old statements are great for this) and they don't pay you out...send a letter telling them that you were 100% vested and are entitled to that money. Let them gently know that legal counsel will be retained if the remaining portion isn't paid. Even if you were fired for embezzlement you are entitled to that money because the 401k is separate from the employer...they simply can't keep it.
2007-04-26 03:57:42 · answer #2 · answered by digdowndeepnseattle 6 · 0⤊ 0⤋
Not if you were 100% vested. However, please make sure that you are talking about 100% vested on employer contributions and not just 100% vested on employee (your) contributions.
I worked for a company which would not vest employer contributions until you had worked there for a certain period of time. In such a case, if you do not meet the tenure criteria for vesting some or all of the employer contribution, then you should not expect to be able to take some or all of the employer contributions made on your behalf.
2007-04-25 14:54:05 · answer #3 · answered by kslee5 2 · 0⤊ 0⤋
No - if they were vested they must pay that portion to the employee.
In rare cases a court may order differently but these instances are are as remember ---the funds are in an in his name ---if the employer took the money - it would be an early withdrawl of funds if he was not retirement age and subject to heavy penalty tax.
2007-04-25 14:56:10 · answer #4 · answered by Anonymous · 0⤊ 0⤋
No. If the employee was vested, then it is the employee's money.
2007-04-25 14:52:26 · answer #5 · answered by A5150Ylee 4 · 0⤊ 0⤋