A 401(k) plan is for the benefit of a U.S. citizen. Contributions to foreign nationals are not permitted.

It sounds to me like your cousin will need to prove that he is a citizen. It also sounds like the 401(k) plan administrator reached an "oh no" moment where they realized they have been allowing contributions into the plan that should not have been allowed. That will cause them to have to make a correction and most likely work with the Department of Labor to get their plan in compliance.

If your cousin is truly a citizen, get the birth certificate. If he is not, I don't think he will end up having recourse to get that money. If in doubt, the place for him to go to determine his rights is the Department of Labor.

First off, tell your cousin to take his father's birth certificate and his entrance visa to USCIS and prove his citizenship through USCIS regulation section 320 of the Immigration and Nationality Act (INA). Under rulings by USCIS, birth certificate is not required. A letter from the USCIS will state whether he is a citizen or not. Second, his contributions to a 401K plan are from his wages he earned, therefore not the property of UPS.
Your cousin can file a complaint with DOL but would do better getting an immigration lawyer to help through the hoops at the USCIS. Try this site to begin your research.
http://www.uscis.gov/portal/site/uscis/menuitem.eb 1d4c2a3e5b9ac89243c6a7543f6d1a/?vgnextoid=d4c3a3ac 86aa3210VgnVCM100000b92ca60aRCRD&vgnextchannel=d4c 3a3ac86aa3210VgnVCM100000b92ca60aRCRD

Hmmm...this is a tough one. He should contact a labor attorney. There is a possibility he can sue UPS since it took them 15 years to find out he is not a citizen, terminated him and now they are holding his 401K hostage.