small claim for 401k

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Goro
Posts: 22
Joined: Fri Feb 13, 2015 2:00 pm

small claim for 401k

Post by Goro » Sun Sep 03, 2017 6:17 pm

Hi,

We would like have your advice how to correct wrong vesting year and unpaid company match on 401K.
We are thinking to file small claim. Do you think this is better choice?

Here is the details info.
My spouse got fired May 2017 because of car accident during his work. We understand he had to leave a company.
The issue is wrong vesting year and missing company match for 401k until 2016. To check when they give us match and correct vesting year, we called HR and left voice message several time, but no respose. We sent the letter to them by certified mail with a copy of their 401k plan rule which mentions the benefit, but no response. The HR office locates 4 hours away from here and seems HR comes the office a few times a month. So, it is a little difficult to visit HR office.

1. Wrong Vesting Year
It should be 3 years at the end of Dec, 2016. But, they are still using 1 years. The difference of the vesting rate is 40%.
We asked HR to correct it several time, but no response.

2. Missing Company match
According to their 401k benefit handbook, the qualification of receiving match is 1,000 working hours for the year and employed at the end of the year. The match amount is 50% of employee contribution of 1st 5% of salary. The match is posted to 401k account around June/July next year.
My spouse meets the qualification for 2014, 2015 and 2015, but as of today, they only gave the match for 2015.
company match for 2014: no match until now <--- We asked several time in 2015, but they did not given clear answer.
company match for 2015: received match <--- Received match on June 2016.
company match for 2016: no match until now <--- We are asking HR, but no response.

Best regards,
J&K

Nate79
Posts: 1454
Joined: Thu Aug 11, 2016 6:24 pm
Location: Portland, OR

Re: small claim for 401k

Post by Nate79 » Sun Sep 03, 2017 7:15 pm

Do you have a copy of the plans SPD (summary plan document)? This you need to request to HR. If you have not read the SPD which gives the actual rules for your plan I do not think you can draw any conclusions.

Goro
Posts: 22
Joined: Fri Feb 13, 2015 2:00 pm

Re: small claim for 401k

Post by Goro » Sun Sep 03, 2017 9:05 pm

Hi Nate,

Yes, he has it. SPD on online does not mention exact match %, but the company issued another form of summary description which has exact match %.
I read SPD and summary description one more time and confirmed he is qualified for benefit.

We would like to talk with this company HR. But, they do not response anything for 3 months already.
It is not a big company, bot not too small company.

J&K

ERISA Stone
Posts: 1382
Joined: Tue Jun 24, 2014 8:54 am

Re: small claim for 401k

Post by ERISA Stone » Mon Sep 04, 2017 10:07 am

It's difficult to give you advice without knowing the specific provisions of your plan. Plans can have different eligibility requirements, vesting provisions, etc.

To help to see if the company erred, we would at least need to know:

1. Husband's date of hire and number of hours he worked each year (2000 is approximately full-time)
2. Plans Entry requirements (the maximum it can be is 12 months and 1000 hours during that 12 months)
3. Dates an employee can enter the plan (maximum is semi-annual: 1/1 and 7/1 for a calendar year plan)
4. Vesting Years of Service (VYOS) definition - likely will either be 1000/calendar year, or continuous service from 1/1 - 12/31 of each year (elapsed time method)
5. Confirmation your husband actually deferred at least 5% in the years we are discussing.

2-4 above would be in the SPD previously mentioned.

TIAX
Posts: 866
Joined: Sat Jan 11, 2014 12:19 pm

Re: small claim for 401k

Post by TIAX » Mon Sep 04, 2017 1:53 pm

Goro wrote:
Sun Sep 03, 2017 9:05 pm
Hi Nate,

Yes, he has it. SPD on online does not mention exact match %, but the company issued another form of summary description which has exact match %.
I read SPD and summary description one more time and confirmed he is qualified for benefit.

We would like to talk with this company HR. But, they do not response anything for 3 months already.
It is not a big company, bot not too small company.

J&K
I'm not sure what "another form of summary description" means. If it's not clear in the SPD (which I doubt), ask for the Plan Document. By "small claim" do you mean filing suit against your employer in small claims court? What dollar amount are we talking about here? If you're serious about going this route, you should consider waiting until he leaves the company.

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susa
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Re: small claim for 401k

Post by susa » Mon Sep 04, 2017 3:05 pm

TIAX wrote: ....serious about going this route, you should consider waiting until he leaves the company.
Ugh, got terminated May 2017 based on OP.

Goro
Posts: 22
Joined: Fri Feb 13, 2015 2:00 pm

Re: small claim for 401k

Post by Goro » Mon Sep 04, 2017 3:19 pm

Hi ERISA Stone,

Thank you for advice.

1. Husband's date of hire and number of hours he worked each year (2000 is approximately full-time)

2013 Sep: Joined the company.
2013: less than 1,000 hrs
2014 Oct: Participated in 401k
2014: full time, around 2,000 hrs
2015: full time, around 2,000 hrs
2016: full time, around 2,000 hrs
2017 May: Left company
2017: less than 1,000 hours

2. Plans Entry requirements (the maximum it can be is 12 months and 1000 hours during that 12 months)
* work at least 1,000 hours in 12 consecutive months
3. Dates an employee can enter the plan (maximum is semi-annual: 1/1 and 7/1 for a calendar year plan)
* Jan. 1, Apr.1, July 1, Oct 1 after the employee meet plan entry requirement #2
4. Vesting Years of Service (VYOS) definition - likely will either be 1000/calendar year, or continuous service from 1/1 - 12/31 of each year (elapsed time method)
* Vesting begins on the date of hire, not the date of participate in 401k. 1,000 hrs per calendar year.
5. Confirmation your husband actually deferred at least 5% in the years we are discussing.
* confirmed. He deferred more than 5% per paycheck. Only he could not deferred 5% at the last paycheck of the year because he reached max. contribution per the year.

J&K

delamer
Posts: 3251
Joined: Tue Feb 08, 2011 6:13 pm

Re: small claim for 401k

Post by delamer » Mon Sep 04, 2017 3:26 pm

I'd try a letter to the CFO and CEO outlining the problem before going to court. You could try having an attorney send the letter.

Goro
Posts: 22
Joined: Fri Feb 13, 2015 2:00 pm

Re: small claim for 401k

Post by Goro » Mon Sep 04, 2017 3:38 pm

Hi Tiax,

SPD is 30 pages long, but it does not clear mentions some numbers, eg, matching %. It says like "contact plan sponsor". However, the company issued "summary description", it is 24 pages. This includes entry requirement, venting definition and match %, distribution and statement of ERISA rights.

From missing company match and wrong vesting year, we are talking $2,500-$3,000.

He left company already.
We just want company give the company match correctly and correct the vesting year. However, the company has not replied anything to us even we sent the letter by certificated mail.

J&K

Goro
Posts: 22
Joined: Fri Feb 13, 2015 2:00 pm

Re: small claim for 401k

Post by Goro » Mon Sep 04, 2017 3:43 pm

delamer wrote:
Mon Sep 04, 2017 3:26 pm
I'd try a letter to the CFO and CEO outlining the problem before going to court. You could try having an attorney send the letter.
Hi Delamer,

Thank you for your advice.
We will send the letter to CFO and CEO before going to court. Our goal is not suing them, jut we want the correct company match and the correct vesting year.

J&K

ERISA Stone
Posts: 1382
Joined: Tue Jun 24, 2014 8:54 am

Re: small claim for 401k

Post by ERISA Stone » Mon Sep 04, 2017 8:49 pm

If the matching contribution was given, then I think you have an argument. However, it sounds like the match is technically discretionary based on your description of the SPD. But if the company is handing out the other summary you mentioned, they probably provide the match even though it may technically be discretionary.

The letter to the CFO might be a good idea. If they can't provide a reasonable explanation, I would file something with the DOL. I'm not sure if it would do anything, but it's worth a try. I've never heard of someone going to small claims over something like this. I suppose it wouldn't hurt but I am certainly no legal expert.

Goro
Posts: 22
Joined: Fri Feb 13, 2015 2:00 pm

Re: small claim for 401k

Post by Goro » Mon Sep 04, 2017 10:36 pm

ERISA Stone wrote:
Mon Sep 04, 2017 8:49 pm
If the matching contribution was given, then I think you have an argument. However, it sounds like the match is technically discretionary based on your description of the SPD. But if the company is handing out the other summary you mentioned, they probably provide the match even though it may technically be discretionary.

The letter to the CFO might be a good idea. If they can't provide a reasonable explanation, I would file something with the DOL. I'm not sure if it would do anything, but it's worth a try. I've never heard of someone going to small claims over something like this. I suppose it wouldn't hurt but I am certainly no legal expert.
Hi Erisa,

Thank you for advice. Yes, we feel "discretionary", that is a reason we called them several times and sent a letter to them because we want to confirm if our understanding is correct, but no response from them.
We found we can request assistance from employee benefit security administration, DOL. We will try it before small court.

Thank you so much.
We will let you know any progress.

J&K

TIAX
Posts: 866
Joined: Sat Jan 11, 2014 12:19 pm

Re: small claim for 401k

Post by TIAX » Mon Sep 04, 2017 11:10 pm

Goro wrote:
Mon Sep 04, 2017 10:36 pm
We found we can request assistance from employee benefit security administration, DOL. We will try it before small court.
FYI, the EBSA is generally not helpful.

Goro
Posts: 22
Joined: Fri Feb 13, 2015 2:00 pm

Re: small claim for 401k

Post by Goro » Thu Oct 26, 2017 10:10 am

Hi,

Brief update

After talked with EBSA, we finally received missing company match. We did not use small claim court. Still the vesting year is wrong and we will continue asking previous company to fix it.

J&K

Raabe34
Posts: 168
Joined: Tue Apr 14, 2009 9:58 am

Re: small claim for 401k

Post by Raabe34 » Thu Oct 26, 2017 10:46 am

Have you talked with the recordkeeper/tpa?

clydewolf
Posts: 677
Joined: Tue Jul 21, 2015 12:51 pm

Re: small claim for 401k

Post by clydewolf » Thu Oct 26, 2017 1:30 pm

Did the employer make matching contributions to the 401k for the missing year?

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