Laid off before 100% vested, am I entitled to % of company match?

[zydeco]

My previous employer (in Illinois) laid me off two weeks before my fifth anniversary, when I was to become 100% vested in my 401(k).

(My entire division was laid off, so my question is not about discrimination or anything like that).

My ex-employer had a 5-year shelf vestment plan (0% until the fifth anniversary), with a $500/max company match per year. So in my opinion I had already contributed my share of the company match only a few weeks into the start of my fifth year.

My ex-employer now claims that I'm entitled to 0% of my company match money. Sure, it's only a little over $2,500 but it's not pocket change either.

Is there any way I can claim that I met the conditions of the company match early enough in my vesting year to claim some (maybe not all) of the company match money? Or am I essentally grasping at straws here?

Thanks for any advice in advance...

 

[ALawyer]

One of the key movers to get ERISA enacted in 1974 was the effort to prevent future horrible circumstances in which long term employees of a large company are dropped before they vest. That's what had happened at the former Studebaker auto company, which had a 20 year cliff vesting plan.

The ERISA protections reduced the duration in which employees were at risk, but did not eliminate the problem. It gave a series of alternatives companies could use, and most chose step vesting, with a percentage vesting over the years. But cliff vesting was a choice and if that's what your company chose, and you chose to work there knowing the risks, I am afraid you are out of luck.

I would call the US Department of Labor to make sure the period is 5 years and there are no exceptions that can possibly shorten it. And I would not be so quick to assume that just because the whole division was laid off, it was not done as part of a plan to keep employees from vesting. That would require a knowlegde (or an approximation) of the census of employees (for example, if the division was set up in March 1997 and most of the employees were hired then, closing down in February 2002 would seem more than coincidental). Many companies, in such circumstances, accelerate the vesting as a voluntary act. You'd not be surprised to discover that's what executives at such stellar companies as Enron did for themselves....