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Asked 4/7/2008
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How can an employer change the plan regulations without the employee's consent? Our old plan allowed us to make loans againist our account, now they have made changes to were employee's are not able to do so. None of our employee's received notice of the changes. Several of us wanted to withdrawl from the plan and place our money into a 401k through our financlal institution. Our employer has told us that we can not withdrawl our vested money only that we can stop contributions. We can only receive a loan through hardship, reach retirement age or leave the company before we can now receive our money. Please help we are not sure how this can be done without the option for us to agree to the new terms or withdrawl from the plan all together. Please advise. |
Answer 1/1 - Submitted 7/30/2008
Technically it's your employers plan not the employees plan. They can make changes to the 401K plan without any consent from the participants. You cannot w/d your funds...it's a tax rule/law. You can roll your plan over to another 401K plan only when you leave this employer. Ask your HR Department for a copy of the Summery Plan Description. This document will or should give you all the info you will need to know about the plan going forward. You can stop your contributions to your 401K, but you cannot not remove the $$$. Your money is still invested even if you're not making contribs.
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