Employeer terminated 401k plan for ONLY our branch

[Guest rapidskies]

Our branch is part of a large holding company and my branch along with the rest of the company was in a 401k that had employeer matching. The main company moved us under a different branch and in the process terminated our 401k that had matching and gave us the option to be part of a new non-matching 401k the company above us uses. Again the rest of the the holding company is still under the matching while our plan was terminated while we remain part of the company.

They also will not allow us to roll that 401k over to another plan citing we work for the same company. Is this legal?

[ETA Consulting LLC]

Our branch is part of a large holding company and my branch along with the rest of the company was in a 401k that had employeer matching. The main company moved us under a different branch and in the process terminated our 401k that had matching and gave us the option to be part of a new non-matching 401k the company above us uses. Again the rest of the the holding company is still under the matching while our plan was terminated while we remain part of the company.

They also will not allow us to roll that 401k over to another plan citing we work for the same company. Is this legal?

Entirely legal. Plan Participation is not protected from cutback. Therefore, there is no rule saying once you're allowed plan entry it cannot be taken away. When the employer does this, the plan (as a whole) must continue to pass the non-discrimination tests. Since you're still employed, there is no severance of employment to allow for a distribution and rollover to another plan or IRA. It's just a matter of 'potentially' bad employee relations or other factors, but entirely legal.

Good Luck!

[Guest rapidskies]

Our branch is part of a large holding company and my branch along with the rest of the company was in a 401k that had employeer matching. The main company moved us under a different branch and in the process terminated our 401k that had matching and gave us the option to be part of a new non-matching 401k the company above us uses. Again the rest of the the holding company is still under the matching while our plan was terminated while we remain part of the company.

They also will not allow us to roll that 401k over to another plan citing we work for the same company. Is this legal?

Entirely legal. Plan Participation is not protected from cutback. Therefore, there is no rule saying once you're allowed plan entry it cannot be taken away. When the employer does this, the plan (as a whole) must continue to pass the non-discrimination tests. Since you're still employed, there is no severance of employment to allow for a distribution and rollover to another plan or IRA. It's just a matter of 'potentially' bad employee relations or other factors, but entirely legal.

Good Luck!

Thanks for the info not what I was hoping for but appreciate the insight.