Can my employer change the 401k plan or make an exception for me?
Generally, no. The federal regulations that govern 401k plans require that 401k plans do not discriminate against employees. Plans must have uniform rules and the rules must apply in a uniform manner. For example, if your plan permits hardship withdrawals it must establish specific rules for those distributions. Plans can establish some variances in rules across different business units, but once the rules become effective they cannot change without amending the entire plan. In order to make an exception or change the rules, the plan has change for everybody. Even when a 401k plan desires to make a change, changes often require amending the legal documents that govern the plan. Amending the 401k plan document requires help from employment lawyers to draft language, issuing new documents to participants and instituting new procedures. This is often a slow and cumbersome process. For that reason, plan administrators rarely make these changes.
401k plan rules in Dallas and Fort Worth, Texas
Amending a 401k plan is not a simple process. Your employer cannot just decide to change the plan and write a new rule. An amendment must comply with federal law as well as IRS and Department of Labor regulations. Depending on the amendment, the employer may have a duty to make formal notice to participants prior to its enactment. Additionally, depending on the amendment, enactment may have to delay by a specified time period or may not become effective until the beginning of the next plan year. Certainly not a simple process.
It never hurts to ask for an exception. In limited circumstances some processes can be altered or accelerated. If your request is denied, you do have a right to file a claim if you believe you are being denied a benefit under the plan through the denial. If you believe your employer is not following the plan but telling you “those are the rules” then it may be very important to file a claim and possibly appeal or file suit to protect your benefits. You may also want to consult with an employment lawyer near you to discuss your plan rules and options to pursue your desired goal from the plan.