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Asked 3/26/2010
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My employer is automatically withdrawing double the amount of the agreed up payment for my 401k loan. Several years ago (at age 59 1/2) my employer allowed me to borrow against my 401k loan, with repayment via an automatic payment withdrawn from my salary once a month for a period of 5 years - to be administrated automatically from their finance offices. After 2 1/2 years the automatic monthly withdrawls from my salary terminated without any notification of default or change in terms of the loan. At the time I just thought they would contact me to let me know what I needed to do next or why they weren't taking the payments out of my salary, but they didn't contact me or send any written notifications and unfortunately I forgot about checking into it further. Now, approximately a year and a half later, my employer has begun withdrawing the loan payment again - but they're taking the full amount of the monthly payment from each paycheck they issue me instead of the previously agreed upon single monthly payment - more than doubling my payments each month because our payment schedule is every other week on Fridays. Basically, my employers' finance department made an administrative error that they are trying to recoupe as quickly as possible - and I realize that I should have followed up sooner, but do they have the right to legally withdraw whatever amount they want to from my paycheck instead of just defaulting the 401k loan or working with me to agree upon a new payment schedule or just resuming the old schedule? |
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