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Asked 3/21/2008

401k laws

How long does an employer have to deposit 401k dollars from you check into your 401k plan? are there any penalties?

 
 
 
 
 
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Answer 1/2 - Submitted 11/4/2009

Deposits into a 401k account must be made in a "timely" manner. If you do not see your deposits within two weeks of the time they are taken out of your check, you can to the following:

1. Ask you company HR department why the deposits are taking so long
2. Ask your 401k provider why the deposits are taking so long

 
 

Answer 2/2 - Submitted 11/5/2009

"Technically" reasonable timeframe is defined as the 15th business day of the month following the deduction from your paycheck. After working for an administrator I know this OFTEN does not happen. Some employers send them every pay period, some once a month...some rarely. There are no technical penalties, but you can file complaint if they are extremely bad. In some cases they have to make a "lost earnings" contribution, meaning the money that was not deposited could have made money if invested... This becomes a problem if loan payments are not sent in frequently, as some companies will default them quicker than others. Speak to your HR>.. let them know you know your rights.. your states' AG or Department of Labor can help if they do not listen

 
 
 
 
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