Can my employer stop contributing to my 401k?
Generally yes. Employers are not required to offer retirement benefits; nor are they required to make matching contributions, profit sharing, or any other contribution. (With the exception of certain safe harbor plan designs that require safe harbor contributions.) If your employer has a 401k, ESOP, or other defined contribution plan and makes contributions for you, in most cases they can stop contributing at their discretion.
Exceptions when an employer cannot stop contributions to your 401k
There are some exceptions. Employers cannot stop contributing to some employees and not others over unrelated issues. For example, an employer could not stop contributing to your account but continue to contribute to others because they do not like you, you filed a discrimination charge with the EEOC, they want you to quit and other reasons unrelated to plan administration. On the other hand, they may be able to stop contributing to your account if you work for a segment of the business that is not eligible for those contributions or because you went from full time to part time and part time employees are not eligible to participate in the plan.
Additionally, under some IRS regulations plans commit to making contributions to all eligible employees in exchange for simplified administration. In those cases, employers cannot stop contributions unless you become ineligible for the plan, the plan changes how it operates under IRS regulations, or the plan freezes. Other exceptions may apply based upon your plan rules, your employer’s rules and your particular circumstances.
Employment attorneys for 401k plan problems
If you believe your employer is not following the plan rules, you should contact a Fort Worth or Dallas employment attorney that understands 401k plans. Employment lawyers help clients resolve 401k plan problems in Dallas, Texas and Fort Worth, Texas. Retirement savings are becoming increasingly important. Missing out on employer contributions may be detrimental to your financial future.