Author Topic: 401(k) Catch-up  (Read 1201 times)

Numbers Man

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401(k) Catch-up
« on: December 09, 2013, 08:46:34 AM »
My wife's company stopped the 401(k) catch-up even though the contribution percentage on the Fidelity website would have hit the $23k level for the year on the last paycheck ($17,500 plus $5,500 catch-up). The benefits department said that a catch-up form was not filled out so you lose. In other words, they don't want to re-issue a payroll check. This is a case of where the benefits department forgets who the customer is. They did not even want to help even though there are several weeks left until the end of the year.

 The spouse starting working for a new company a little over a year and was eligible to contribute to the 401(k) this year. Company pays employees monthly. My wife has already received the last paycheck.

I guess we can write a letter to the owner of this private 2 billion dollar company but I'm sure the wife doesn't want to ruffle any feathers. I will be fully funding the HSA to make up for this.

But how can a company stop your 401(k) contribution. Especially since the Fidelity website reads that the contribution percentage is for regular and catch-up contributions?

ZiziPB

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Re: 401(k) Catch-up
« Reply #1 on: December 09, 2013, 09:12:05 AM »
It depends on the plan documents and the defaults set in the plan.  In my company's plan, they will continue contributions at the stated percentage even if you hit the IRS max unless you opt out.  But there are a lot of plans that require participants to specifically opt in for supplemental or afer tax contributions.

You will need to have a look at the plan documents and if they followed the documents, then I don't think you can do anything about it.