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Asked 12/11/2008

How long does the employer have to deposit 401k money that is taken out of your paycheck

How long does the employer have to deposit 401k money that is taken out of your paycheck

 
 
 
 
 
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Answer 1/2 - Submitted 9/12/2011

The general rule was "as soon as administratively feasible". Since it is feasible for the employer to make the deposit within a few days, that is the answer.

Not long ago 30 days was considered to be fast enough for employers to deposit 401k money to your plan, but that is no longer the case.

In an audit, the department of labor will want to see a faster turnaround than that. If you are experiencing delays of more than a week or two that is getting excessive.

 
 

Answer 2/2 - Submitted 9/12/2011

Depositing your money into your 401k account should be pretty much instantaneous. With such a strong push to doing banking online, and direct depositing of paychecks, transferring of funds shouldn’t be delayed by too much time.

I would expect these funds to be added to the 401k at the same time your employer deducts for taxes, health benefits, etc.

Honestly I would be more than concerned if my employer was tardy in putting money into my retirement account. I would be worried that there was some kind of cash flow problem which would be a very bad thing to see.

 
 
 
 
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