Q: Can a company keep your vested amounts in a nonqualified deferred compensation plan after seperation?
A:
Anybody can do anything they want, but there may be consequences. The better question is whether you can recover your vested deferred compensation if your employer wants to keep it for itself.
If the deferred compensation program is covered by ERISA, you have a remedy under Section 510 of ERISA. That remedy lets you file suit in federal court and recover your attorneys' fees if you prevail. If the plan is not covered by ERISA, then state contract laws probably give you a remedy. You will have to prove that the deferred compensation plan was a contract between you and your employer, that the Plan says you are entitled to the amounts that vested, and that the employer kept those amounts. You would pursue this remedy in state court.
The problem with pursuing a remedy is that it is expensive to do so. If the vested, deferred compensation is $10,000 but it would cost you $15,000 to recover it, the costs are too high to pursue the remedy. This is a modern example of the old saying, "possession is nine tenths of the law."
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