Shady termination from job then holding 401K for 1 year

[pinkdaydreams]

What is the name of your state (only U.S. law)? TN

My husband was let go from a salary position he had been at for over ten years. Explaination was only position was being eliminated. We were already in a financial hardship due to a work injury and now they won't release his
401k retirement for 1 year due to amount being over $5000. They claim this is to keep employees from quiting just to obtain their retirement benefits. But he was terminated? We can't claim hardship because you have to be employeed by the company. Anyway to force their hand on this?
Thank You in advance

 

[ShyCat]

Anyway to force their hand on this?

No. 401(k) administrators must abide by the plan's rules and ERISA (Federal law). They cannot make exceptions for anyone. I'm sure the "one year" rule is based simply on "termination of employment". "Termination" includes firing, quitting, retiring, whatever.

 

[pattytx]

Of course he was terminated. His job was eliminated and he no longer works there.

The company/plan administrator must follow the plan rules. If the plan rules only allow for distributions for terminated employees annually, then it is what it is. Failure to follow the plan rules could jeopardize the entire plan.

 

[cbg]

Patty is correct - if the plan says funds are not released for a year, then they not only will not, but cannot legally release funds for a year.

 

[pinkdaydreams]

Hey you never know until you ask!

On the good side of irony... when he was terminated it was literally just a few dollars over the $5,000 limit. So I figured I'd play around with some investments and how hard could it be to "itentionally" lose $4.75? Five months later it's up 43%. LOL Couldn't do that again if I had to. I'll be grateful for the rule when the year is up!

Thank You for your replies!

 

[pattytx]

You were lucky. Think about how 401(K)'s that were heavily invested in the stock market looked six months ago. Ug-LY!!