If you have less than $5,000 in the 401(k), the administrator can remove your assets from the plan without your consent and most plans are set up to do exactly that. They can transfer your money into an IRA on your behalf, but this will mean passively accepting an investment option and fees that were not of your choosing.
Worse, if your balance is less than $1,000, the plan can simply send you a check in the amount of your balance. This could subject that money to income taxes and penalties if you do not quickly deposit it in a qualified retirement plan.
Ask the expert Q: Why are federal and state reporting of 401(k) deferrals different?