Legal Marketing & PR

Do you still have your 401(k)?

By Edward Poll, J.D., M.B.A., CMC

Many companies are going bankrupt. This is a growing practice area of the law. What will be the impact on the pension plans through bankruptcy?  A number of large law firms are closing their doors ... what will be the impact on their 401(k) plans?  Have they become 101(k)’s, or gone away altogether?

Chapter 7's usually terminates the 401(k) enabling the participant to roll it over into another appropriate plan. Chapter 11 may or may not impact the fund.

Staff should review the plans where there funds are placed . Unfunded employer contributions are at risk. There may be a full vesting if the firm discontinues contributions ... but unfunded is still unfunded!

While I claim no specific expertise in this area, there has been an entire generation of employees/staff/associates, et al., who have counted on the growth of their pension plans for retirement, early or otherwise. Now, for the first time in years, there is a feeling among many that they may not be able to retire at all ... or at least many years later than anticipated.

In the recent past, we talked about multiple generations working together in the same firm, with all of the consequent challenges of communication. While many thought the Baby Boomers (400,000 of them) would retire in the next 10 years, it is conceivable that they may not be able to leave because of the decreased value of their pensions and other savings.

What will happen?

Full post as published by Law Biz Blog on November 29, 2008 (boomark / email).