Employer floating 401K deduction ?

Financial Planning - Financial planning in general. (Moderated) 

  Yahoo!   Google   Windows Live   del.icio.us   digg   Netscape

Subject Author Date Employer floating 401K deduction ? Noveau67 02-18-2008  Re: Employer floating 401K deduction ? Rich Carreiro 02-18-2008  Re: Employer floating 401K deduction ? John A. Weeks I... 02-18-2008  Re: Employer floating 401K deduction ? rick++ 02-18-2008  Re: Employer floating 401K deduction ? Sandra Loosemor... 02-18-2008
Posted by on February 18, 2008, 12:51 pm I just started a new 401K at work. The first 401k deduction came out out of my paycheck Friday a few days ago. Checking my 401K account online, I see the balance is still zero, on Monday. I called up the 401K folks, and they said employers often "wait a few days" before they get the money from the paycheck deduction over to the 401K folks. Hmmmm. Is it legal for this to happen ??? I haven't called my company yet, about it. -------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup. Posted by Rich Carreiro on February 18, 2008, 1:28 pm Noveau67@aol.com writes: > I just started a new 401K at work. The first 401k deduction came > out out of my paycheck Friday a few days ago. Checking my 401K > account online, I see the balance is still zero, on Monday. I called > up the 401K folks, and they said employers often "wait a few days" > before they get the money from the paycheck deduction over to the 401K > folks. Hmmmm. > > Is it legal for this to happen ??? Yes, it is. I believe they have until the 15th of the month after the month deferrals were made in to make the deposit. In other words, your January deductions have to be deposited by 15 February. Usually it happens in a week or two, though. -- Rich Carreiro rlc-news@rlcarr.com -------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup. Posted by John A. Weeks III on February 18, 2008, 1:41 pm In article Noveau67@aol.com wrote: > I just started a new 401K at work. The first 401k deduction came > out out of my paycheck Friday a few days ago. Checking my 401K > account online, I see the balance is still zero, on Monday. I called > up the 401K folks, and they said employers often "wait a few days" > before they get the money from the paycheck deduction over to the 401K > folks. Hmmmm. > > Is it legal for this to happen ??? > > I haven't called my company yet, about it. Yes, perfectly legal. In fact, employers used to abuse this by grouping up deposits for an entire quarter. If a company got in trouble, they might never make the deposit, or use it to pay company bills. As a result, a law went into effect that regulates how long a company has to deposit 401K funds. I don't remember what that time period is, but something like 6 weeks comes to mind. You are smart to keep track of this. No one will care as much about your money as you do. -john- -- ====================================================================== John A. Weeks III           612-720-2854            john@johnweeks.com Newave Communications                         http://www.johnweeks.com ====================================================================== -------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup. Posted by rick++ on February 18, 2008, 3:14 pm My company has a really quirky policy for its contribution to the 401K: lump sum April of the following year. And its deposited as advertised. A company is not required to make any contribution of its own at all. -------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup. Posted by Sandra Loosemore on February 18, 2008, 2:34 pm Noveau67@aol.com writes: > I just started a new 401K at work. The first 401k deduction came > out out of my paycheck Friday a few days ago. Checking my 401K > account online, I see the balance is still zero, on Monday. I called > up the 401K folks, and they said employers often "wait a few days" > before they get the money from the paycheck deduction over to the 401K > folks. Hmmmm. > > Is it legal for this to happen ??? Today's a legal holiday in the US so I wouldn't expect anything to happen today. Next business day, or even a few days, to make the transfer is nothing unusual, though. Recently my employer has been having problems with 401K money getting stuck after we switched payroll services. When I asked our payroll person about it, she said that the law requires the deposits to be made within 2 weeks. It also seems like it's a multi-step process: she has to run the payroll and poke Fidelity, Fidelity has to poke her back, and she has to respond to authorize funding the accounts, before anything will happen. On top of that, I noticed that Fidelity's web site usually doesn't show the deposit until the business day after it arrives. So, yeah -- somebody's making money on the float, and it isn't me, but that's kind of the way it works. -Sandra the cynic -------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup. Similar Threads Posted 401k and employer Bankruptcy March 19, 2007, 8:45 am 401k entirely in employer stock April 8, 2007, 8:51 am Solo 401k Employer Contribution February 2, 2008, 6:18 am Rental Property Refinance Tax Deduction February 19, 2007, 5:02 am 401k rollover into 401k or IRA question January 12, 2007, 3:33 pm 401k October 22, 2006, 4:48 pm 401k "force out" September 18, 2007, 5:15 pm 401k rollover October 30, 2006, 5:01 am 401k, really worth it? November 1, 2006, 7:11 pm Individual 401K LLC November 5, 2006, 8:34 am