Retirement pay not given

What is the name of your state?Kentucky

My place of business (private school) closed their doors. We were instructed to find new jobs asap. The end of the school year was May 25th. Due to the fact that the business closed , we were automatically 100% vested we were told. I was offered a position and left in late April. Now am being told that I am not 100% vested and don't get my funds because I left before the last day of business....Is this crazy?

Maybe. But without knowing a thing about your past employer's retirement plan, it's impossible to comment.

Let's try to at least figure out the starting point -

Was this a defined benefit plan (i.e. a true pension plan) or was it a defined contribution plan (such as a 401k)?

reply

it was a employee retirment plan and 401k

Beth3 said:

Maybe. But without knowing a thing about your past employer's retirement plan, it's impossible to comment.

Let's try to at least figure out the starting point -

Was this a defined benefit plan (i.e. a true pension plan) or was it a defined contribution plan (such as a 401k)?

Click to expand...

Whether the Plan calls for 100% vesting in the event of the business closing is not something anyone here can say but I'd guess it's quite unlikely. What you were TOLD doesn't matter - it only matters what the Plan Document specifies as that is the legal document that has been filed with the IRS and entirely governs the Plan.

1. You are entitled to receive any contributions YOU made into the Plan no matter what (plus or minus the fluctuations in the investments you choose.)
2. You are entitled to receive any contributions your employer made into the Plan subject to the vesting schedule outlined in the Plan. I can't tell you what that is because there are a number of options an employer may choose from.

Do you have the name of the Plan Trustee? That would be the investment firm who manages the 401(k) Plan and individual accounts. If you know who that is, call them and ask to speak to the person responsible for administration of this school's retirement plan. They should be able to give you the straight-scoop on any monies you are due. The Plan Trustee has major responsibility for Plan legal compliance and certainly should be on top of things and able to explain to you exactly what the situation is.

If you don't have that info or you can't get a straight answer from them, then contact the federal Department of Labor. 202-693-4650

I had the opportunity to run this question past a 401k expert last night. She said it is quite typical, when a plan is terminated, for the participants to become fully vested. She said it is also typical for employees who do not stay through to the end to be held to the original vesting schedule (i.e. if you were only 80% vested on the day you left then you would only be entitled to 80% vesting now, even though employees who stay through to the last day to receive 100% vesting). However, it all depends on the plan document.

In other words, this is only illegal if your plan document calls for something different to happen.