Attorneys usually write contracts for employers. Consequently, If the previous company you worked for contains the specific clause you quoted in its 401k plan contract, it well may be that this is legal. There may not be any recourse except to wait until the end of the plan year in which falls the third anniversary of your date of employment.

Is there another firm that handles the 401k plan for your previous company? If there is, you can contact that firm directly and ask someone there about this clause. If not, I would suggest taking your contract to an attorney who specializes in 401k plans and pension plans. The attorney might charge you a small fee for looking over the contract, and can advise you of your legal options.

Conservative Wordsmith ™ Susan Baldwin wrote this answer especially for you, and appreciates the opportunity to answer your special WebAnswers question.

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Fidelity is great firm to do a rollover. They have people who are experts. They can help you with your rollover questions. I hope this answers your question. Thank you.