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John, Employment Lawyer
Category: Employment Law
Satisfied Customers: 5685
Experience:  Exclusively practice labor and employment law.
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I was off 3 months before my 401(k) was vested (5 yrs

Customer Question

I was laid off 3 months before my 401(k) was vested (5 yrs employment required). I am in a bargaining unit and the contract states that "an employee shall retain his/her seniority status and have the right to post for any position as a union member for 24 months following the date of their layoff. Seniority shall continue to accrue during the period in which an employee is on layoff. I was fortunate to be rehired with this employer after 8 months; however, the employer withdrew the funds they had invested in my 401(k), and starting matching new funds on the effective date of my rehire. All the money my employer had matched in my 401(k) for almost 5 years with withdrawn. It doesn't seem right. Can you tell me if there is anything I can do?
Submitted: 2 years ago.
Category: Employment Law
Expert:  John replied 2 years ago.
Hi, thanks for submitting your question today. My name is John. I have over 13 years of legal and consulting experience in this area. I’m happy to assist you with your question today.

If your plan does not have break in service rules, then you restart whenever you have a break in service. The law however, does allow plans to adopt break in service rules. The only conceivable break in service rule that the plan could be relying on (there are two others but they are not applicable to your situation) is the one year rule. This rule states that an employee with break in service, like you had, must be a participant for one year after the break to regain prior years' service.

This does not have to do with your union bargaining agreement, but rather the pension plan and its break in service rules. Its a relatively complex issue and I wouldn't expect most HR persons to know anything about it. What I would recommend you do however, is two things 1) get a copy of the pension plan, you are entitled to that under law, 2) review it yourself or take it to a lawyer to review whatever break in service rules it has. if it doesn't have any, you have indeed lost that 4yrs9months of employer contributions. If it does have break in service rules, you should receive those contributions back in about a year.

I believe this answers your question. However, if you need clarification or have follow-up questions regarding this matter, I will be happy to continue our conversation – simply reply to this answer. If you are otherwise satisfied with my response, please leave a positive rating as it is the only way I am able to get credit for my answers. Thank you, ***** ***** wish you all the best with this matter.