Legal Question in Business Law in Illinois

Re: 401K Transfers when one company buys another

I find it hard to believe that an acquirer has the ability to force you to rollover your 401(k) account to their plan. The old company is terminating the plan and in those circumstances, generally you have a right to various distribution options, including partial or complete rollover to an IRA or employer plan of YOUR CHOICE because of that event, regardless of what your new employer is telling you. Because the current plan sponsor went under, leaving your money in the old plan is probably not an option. However, leaving your money with the old plan's investment advisors may be an option, depending on whether the adivsors sponsor IRAs or other vehicles appropriate to your circumstances. And, pursuant to the plan termination, you should have received information on all of these options a reasonable time, usually 90 days, before the decision of what to do with your money has to be made.

The good news is that ERISA provides for attorney fees if you choose to challenge your new employer's interpretation, but my hope would be that your situation won't get that far. You should consider consulting an attorney skilled in ERISA and other labor law issues to obtain what you want. You may also contact the US Department of Labor, and ask them to look into the situation at no cost to you.

Before "stirring the pot", I recommend that you make sure you are hired by the new company first, if that is your choice. That way, if you lose your job because of "troublemaking", you would have a better set of facts for yet another suit for wrongful discharge.

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