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January 12, 2009
By Emily Brandon
U.S. News & World Report

Unexpected job loss can derail retirement plans in an instant. American employers shed 524,000 jobs in December, and 31 percent of employed adults ages 45 and up think it's likely that their job will be eliminated this year, according to a recent AARP survey. The good news is that if you do get laid off, you can still keep your retirement plan intact. Here's how to handle your 401(k) if you lose your job or your company goes under:

Find out if you're vested. Any money that goes into your 401(k) is yours, even if your company folds. However, employer contributions must be vested before they're permanently yours. About 44 percent of 401(k) plans provide immediate vesting for matching contributions, according to the Profit Sharing/401(k) Council of America, which means you get to keep your employer's match as soon as it's deposited. Other plans require you to be with the company two or three years before you can keep your employer match. And some companies impose a graduated vesting schedule in which you can keep a gradually increasing percentage of your employer's contributions, based on your job tenure

Read entire article: http://www.usnews.com/articles/business/retirement/2009/01/12/5-ways-to-protect-your-401k-if-youre-laid-off.html