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401K Vesting Changed After Leaving Company

Personal Finance & Money Asked by JBC on January 10, 2021

I left a prior employer back in 2012, but I made the mistake of leaving my 401K in the company plan, which is administered by T. Rowe Price.

At the time I left, the balance showed I was 100% vested in the plan. However, about a year later, some of the funds started showing up as no longer vested.

When I inquired what was going on, I was told that the employer discretionary contributions I had received had a different vesting schedule than the other funds. The vesting schedule had previously been entered incorrectly, and under the new settings I was only 60% vested in these funds.

The plan administrator (T Rowe Price) is telling me there is nothing they can do, it is up to my former company to resolve. When I talked to my former company, I was told that T Rowe Price had incorrectly entered the original vesting schedule, and the plan is now showing the correct balances.

My question is, do I have any right to the non-vested funds, and if so, how should I go about recovering them? It’s unreasonable to me that I made the decision to leave the company under the impression that I was fully vested only for that to later change; it also seems like T Rowe Price is allowing my former company to arbitrarily update the vesting policy on funds that have already been distributed.

The balance of the non-vested funds is approximately $7,000. I was at my previous employer for a little more than 4 years. I intend to roll these funds over to an IRA at a different institution but would like to resolve the issues with vesting first.

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