Author Topic: give me a facepunch  (Read 2817 times)

ericbonabike

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give me a facepunch
« on: December 12, 2019, 09:13:12 AM »
Was buying a house this previous summer.  Opted to zero out my 401k for 4 months in order to increase liquidity.  Was told by my local HR that our company did a "true up" at end of year.  Took her statement on faith. 
Long story short, screwed myself out of 4 months of company match totaling $2300.


Weirdly, she was right, but not.   All of her anecdotal data was from various workers who had maxed out the 401k early (say in October).   As long as they didn't go into their benefits, and zero out their 401k percentage, the company would look at their percentage of contribution as being valid, even if their actual contribution was zero because of earlier maxing out. 
But in my case, I zero'd out, missed those contributions, then maxed it out in the last quarter.

argh.

meghan88

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Re: give me a facepunch
« Reply #1 on: December 12, 2019, 11:18:24 AM »
That really sucks.  To look on the bright side, maybe think of it as a one-time payment $2300 to learn the lesson that it's best not to take one person's word as gospel if it might cost you $$ to do so?

Any way to appeal this - maybe explain to her how your reliance on her advice had cost you, and ask if there's a way to make up for this?

At the very least, she will learn to be more careful in providing such advice.

RWD

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Re: give me a facepunch
« Reply #2 on: December 12, 2019, 11:27:27 AM »
Animation of your misstep:

Glenstache

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Re: give me a facepunch
« Reply #3 on: December 14, 2019, 11:27:50 AM »
Given that you were increasing liquidity for a large and important purchase (and possible investment) of a house, would you do it differently with the info you have now? It seems like a short term loss for a long term gain. Yes, you missed out on a match, but you also may have missed out on a big change in the market etc during the zero out time as well. Make a note to ask more questions and details about timing in the future, and move on.

ericbonabike

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Re: give me a facepunch
« Reply #4 on: December 19, 2019, 09:37:59 AM »
Given that you were increasing liquidity for a large and important purchase (and possible investment) of a house, would you do it differently with the info you have now? It seems like a short term loss for a long term gain. Yes, you missed out on a match, but you also may have missed out on a big change in the market etc during the zero out time as well. Make a note to ask more questions and details about timing in the future, and move on.

yeah, if I'd known how policy actually would work, I would have set my withholding to 6%, gotten the full match.  Sold a little more stock to make up the deficit.  No biggie.   Just irritated with myself for not reading the fine print.

jeff191

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Re: give me a facepunch
« Reply #5 on: December 23, 2019, 08:36:08 AM »
What does the fine print actually say? Have you read the summary plan description for the true up rules?

I've worked for 2 companies now with a true up and both would true up in your situation. I actually managed one of the benefit admin teams at one of them so had to be very familiar with the language. We would true up even if someone actively changed their contribution to zero. The math doesn't really change based on why the contribution is zero. So if someone contributed 12% for half the year and then stopped for the rest, we would true them up as the match was up to 6%. Or if someone maxed out their contribution in January when bonuses were paid, they would get trued up as well.

If the SPD or plan document language doesn't disallow what you did, you may be able to file a claim. We had it happen a few times where the plan documents and how the plan were actually administered didn't line up. And the regulations say that you have to go by the plan document so we did retroactively make payments to participants at times. I know it's not a big amount but...