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401k and immigration status

401k and immigration status

Old Oct 17th 2010, 3:23 am
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Default 401k and immigration status

Hi Guys,

So my employer told me that i can not take part in my company 401k plan because i am not eligible. Apparently, only US Citizens are eligible... Anyone heard of this before? I know this is not an IRS regulation, so I can only assume its a company rule - are they allowed to discriminate in this way?
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Old Oct 17th 2010, 3:26 am
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Default Re: 401k and immigration status

Originally Posted by dh010447 View Post
Hi Guys,

So my employer told me that i can not take part in my company 401k plan because i am not eligible. Apparently, only US Citizens are eligible... Anyone heard of this before? I know this is not an IRS regulation, so I can only assume its a company rule - are they allowed to discriminate in this way?
Looks like a lawsuit to me. Sue 'em on the way out as your golden handshake. Just document the refusal for now.
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Old Oct 17th 2010, 3:36 am
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Default Re: 401k and immigration status

Originally Posted by dh010447 View Post
Hi Guys,

So my employer told me that i can not take part in my company 401k plan because i am not eligible. Apparently, only US Citizens are eligible... Anyone heard of this before? I know this is not an IRS regulation, so I can only assume its a company rule - are they allowed to discriminate in this way?
Probably some jackass at your company doesn't understand the difference between having a social etc and being a citizen. I have had this problem once or twice myself but it is nonsense and there is no reason why you can't participate. I have an investment licence in Fl and GA so I am up to speed on this.
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Old Oct 17th 2010, 11:27 am
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Default Re: 401k and immigration status

Originally Posted by dh010447 View Post
Hi Guys,

So my employer told me that i can not take part in my company 401k plan because i am not eligible. Apparently, only US Citizens are eligible... Anyone heard of this before? I know this is not an IRS regulation, so I can only assume its a company rule - are they allowed to discriminate in this way?
It may be that whoever it was told you this was confused about IRS eligibility rules. Certainly, as an H1-B holder in the past and as a PR now, I have participated in 401k for many years. I believe that there are some categories of visa holders that can't participate in 401ks because they are not liable to US taxes, I am thinking of G visas and some J visas, but unless you fall into one of those categories you are eligible (assuming you meet the other non-immigration related requirements). Ask to talk to someone higher up the chain of command to try to sort out the confusion.

If on the other hand this is an official policy of the employer, it may constitute nationality based discrimination, which could be grounds for a lawsuit.
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Old Oct 17th 2010, 11:55 am
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Default Re: 401k and immigration status

I second that. I'm not a US citizen but have always invested in a 401k plan.
There may be a probationary period before the employer will match your contribution but I've never heard of them denying participation (it's your $$ after all).

I think the previous reviewer said it correctly, it might depend on what visa you hold and whether you pay (or submit) US tax returns.

Otherwise, I'd consult an ERISA lawyer as yes, it would be discrimination against your nationality and should not be tolerated in any workplace. You could file a complaint with the EEOC but once you go down this road, (and only speaking in terms of practicality) you may want to consider looking for a new job.

But I'd start with speaking with HR or reading up on your company's HR benefits policy. Good luck!
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Old Oct 18th 2010, 12:35 am
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Default Re: 401k and immigration status

Originally Posted by dh010447 View Post
... are they allowed to discriminate in this way?
No... and I smell a lawsuit on the way. It's total rubbish... I participated in my employer's 401(K) program even before I was a PR... with just an EAD.

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