What about being vested? The last 4 jobs I have had, you had to be there X number of years to be 100% vested, meaning that if you left after X years, you could take the company match with you. If you left before that X years, you took a smaller percentage (maybe none if you were there a short time).
Smith
Vesting only applies to money the company puts in. Your money is always yours. A 401K is a great thing to have. If the company gives any sort of contribution or matching funds, that's frosting on the cake. Don't forego the cake because you're afraid you might not get the frosting.
The other detail is called an "exclusion period." An exclusion period says that you have to be an employee for a certain amount of time, often three months, sometime a year, before you can contribute to the 401K plan. This is done by companies that have high turnover, a lot of employees who don't stay long. The exclusion keeps them from having to do the paperwork to open the 401K account and it keeps the 401K administrator from having to deal with hundreds of little accounts belonging to employees who only worked for the company for a few months and may have, in that time, accumulated only a hundred bucks or something.
Some plans also have a "forced distribution." This means that if you leave the company and you have less than some minimum balance in your 401K account (often $1000 but sometime much more), and you don't, yourself, roll that money into some other qualified plan within some period of time (often a year but sometimes quite less), then they will distribute your money to you, i.e. send you a check. This is a disaster because you will have to pay tax on that money as income AND pay a 10% penalty for early withdrawl. The tax and penalty are usually not withheld. This often happens to unemployed people who see the distribution as a windfall and spend it. Then, when tax-time comes, they get caught with a big bill. If you're in a 401K plan and you terminate with the company for any reason, ask if there's a forced distribution and, if so, how long you have. Don't forget that you can roll 401K money into an IRA with no tax consequences and it's not hard to find an investment firm that will open an IRA for $1000 or so minimum deposit.
The exclusion and the forced distribution are done because the company has to pay the 401K administrator a service fee which is based, in part, on how many accounts are in the plan so employeers don't want to have to keep paying for former employees forever. And 401K administrators don't want to have to keep sending statments every quarter, etc., for accounts which are only worth a few bucks.
