Why do companies freeze employees 401(k) plans?

[Techie333]

Well the topic pretty much says it.........Why do companies freeze employees 401(k) plans? Under what section or code of Internal Revenue Code does it allow companies to do this?

 

[Techie333]

bump......need help w/ debate tomorrow........

 

[UberNeuman]

Google is a boy's best friend..

 

[Jzero]

How do they freeze a 401k? Mine is full of MY MONEY. My company can and has suspended their contribution when they needed to save money, and they can probably even remove their unvested contributions, but my contribution is mine....how they going to freeze that?

 

[Techie333]

I don't know HOW they locked it down but as in the case of Enron, the company locked down employee 401(k) plans so that they were unable to sell enron stocks from it...

Read this

 

[Tominator]

Well, if a rumor caused all the employees to sell all their stocks at one time, that alone could ruin a company.

I'd be surprised if the Enron stock was not part of a compensation package where the terms of sale and the conditions of sale were part of an agreement.

 

[Herbman]

From what I understand they changed firms that handled the 401k thus a 30 days lockdown occurred.

With stock prices taking a dump for Enron know one could pull or change there stocks.

 

[Techie333]

thank you very much herbman................that makes sense....i was thinking how in the hell a company could lock up your own plan............now i can go to the debate competition with some knowledge of what the hell im doing...lol......