How to Manage a 401(k) When Your Company Gets Acquired

Learn what happens to your 401(k) during an acquisition and how to protect your retirement savings through the transition.

Find out what type of acquisition happened. Asset purchases and stock purchases affect your 401(k) differently. In a stock purchase, the acquiring company usually keeps your existing plan or merges it with theirs. In an asset purchase, your plan typically gets terminated and you'll need to move your money within 60-180 days.
Get the official communication about your plan. HR will send a formal notice explaining what happens to your 401(k), usually within 30-60 days of the acquisition closing. This document will outline your options, deadlines, and any changes to vesting schedules. Don't rely on office rumors — wait for the official word.
Check if your vesting accelerated. Many acquisition agreements include "change of control" provisions that immediately vest all your employer contributions. Review your account to see if you now own 100% of company matching funds that weren't previously vested. This can add thousands to your balance.
Compare your options for the money. You typically have four choices: stay in the old plan (if allowed), join the new company's plan, roll over to an IRA, or cash out. Cash-outs trigger immediate taxes plus 10% penalties if you're under 59½. Rolling to an IRA usually gives you the most investment options and lowest fees.
Execute your chosen option before the deadline. Plan terminations usually give you 60-180 days to decide and act. Missing the deadline often means automatic distribution — a check mailed to you that triggers taxes and penalties. Set a calendar reminder for 30 days before the deadline to ensure you complete the paperwork.
Update your beneficiaries and contribution rate. Whether you join a new plan or roll to an IRA, update your beneficiary designations immediately. If you're staying with the company, restart your contribution percentage since acquisitions often reset payroll deductions to zero.