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Maybe you will feel that this is "easy for me to say," but if you do not have an immediate need to convert all of the 401k investments to cash and instead intend to maintain them as long term investments for your retirement, those investments will (most likely) recover and continue to grow over the coming years.

A friendly reminder that the IRS considers the combination of "everybody in their own group" and "1 or more participants, whether HCE or not, receiving $0 for the year" invokes the prohibition on using the Average Benefits Test to satisfy coverage. While not typically a problem, if the plan also carves out for eligibility it could become an issue. FWIW

I agree with the other responses being technically correct. But if a sponsor wanted to use a rehire date as a hire date because it brought someone in earlier in the same year I doubt I would make a fuss over it. Having said that, are you positive the eligibility measuring period doesn't switch to the plan year (presumable calendar) if someone doesn't have 1000 hours in their first employment year? In that case, if he worked 1000 hours in calendar 2017 he would enter 1/1/18. All (I think) of our plans are written that way because we can't be bothered checking on hours for continuous off-calendar years.

I hate to say it Jeanie but it is going to be very difficult for you to recover the market losses. A 401(k) plan is an individual account plan and the value of the benefits depends on the value of the investments held in the account - in this case most likely Vanguard mutual funds. As the stock market goes up and down, the value of those investments will go up and down. In all probability, your late husband selected those investments, and the employer will not be responsible for his selection. Vanguard would also not be responsible for the value of the investments going down. Your late husband's employer or Vanguard or both (most likely the employer, but not likely Vanguard) would be responsible for an unreasonable delay in giving you control over the investments in the account. The question in lay person's terms is going to be whether anybody acted unreasonably in delaying giving you access. I think depending on the circumstances a delay of almost two months could be considered unreasonable. For example, when you first called and notified them of the death, and if you told them you are the surviving spouse, if they just sat on their hands and did nothing for almost two months, that could be considered unreasonable. The problem though is neither Vanguard nor the employer will likely just roll over. It will be extremely difficult to get them to budge. They have the advantage and they know it. In these types of cases, that involve investment disputes, it is highly unlikely the DOL will get involved. They will say it is a litigation matter and will not feel it is worth their time or resources. In the end I am guessing you would have to file a lawsuit, and there is a Supreme Court case in which Supreme Court Justice Roberts, in a concurring opinion, suggested you may have to file a claim with the plan and exhaust your administrative remedies before you can even file a lawsuit. If you want to try and recover it will be a lot of work for you. It will be very difficult, and if you want to hire someone to help, it would probably cost more than the $8,000 in losses. It is unfortunate that 401(k) plan litigation is this way - and in fact a lot of litigation is this way - but the old adage of don't throw good money after bad money may apply here.

Believe it or not, some 401(k) plans are pooled, and they can/might have checking accounts. In that case, it is in fact a simple matter of writing a plan check.

He mentioned a "plan checking account", which many employers have. So yes, the employer does not write a check, the investment house does.