Author Topic: 403b Contributions  (Read 1914 times)

Jet9

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403b Contributions
« on: September 16, 2016, 04:42:13 PM »
Hi all:

I contribute to my 403B monthly, and with regularity, contributions that go out of my paycheck at the end of the month take 10 days to arrive in my 403B account. Is that a normal length of time? I feel like I'm losing out on time in the market and someone else is cashing in on my contributions (multiplied by thousands of employees) sitting in their bank account for those 10 days. My husband's 401k contributions are posted 2-3 days after his paycheck is cut. Is there some sort of law governing how long companies can hold on to  that money?

Thank you!

terran

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Re: 403b Contributions
« Reply #1 on: September 16, 2016, 09:16:07 PM »
Sounds pretty long, but probably within the law according to https://www.bogleheads.org/forum/viewtopic.php?t=47449

MrMathMustache

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Re: 403b Contributions
« Reply #2 on: September 17, 2016, 04:15:00 AM »
My bi-weekly 403(b) contributions also take about 10 days to magically show up in the account.

Red Beard

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Re: 403b Contributions
« Reply #3 on: September 17, 2016, 07:35:18 AM »
Through some bizarre circumstances I am currently the custodian or our retirement plan at work (meaning people can sue me individually if they don't like something!). The person who assists us with all of the legal aspects said the rule, like the link above, is essentially that companies must deposit as soon as reasonably possible.

The weird thing about that is that if deposits happen earlier one time (in your case let's say 8 days instead of 10) the employer has set a new expectation as to what is reasonably possible - meaning there is legal precedent for them needing to hit the shorter deposit window going forward.

rhadams1988

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Re: 403b Contributions
« Reply #4 on: September 17, 2016, 09:53:47 AM »
I don't have a better legal answer for you, but it's a really interesting question, so I ran a few numbers. Assuming a 7% return rate, and you get contribute monthly, this represents -0.19% in missed investment return on what you invest every year. If you're investing $18,000 per year into your 403b, that's ~$35/year compared to instant deposits.

My guess is that the reason is simply long processing time or incompetence. But given a large enough organization, this is real money we're talking about. Maybe the Office Space guys are at it again, but they got the decimal point right this time, haha.

Jet9

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Re: 403b Contributions
« Reply #5 on: September 17, 2016, 04:33:11 PM »
Thanks everyone; the links and calculations you've posted will help me be better informed as I look further into this. I do work for a school district that must send the funds to a central, county entity, (and it sounds like maybe I should be grateful it only takes 10 days!) but it does seem a question worth asking. $35 might not sound like a lot, but it seems like an added hidden fee that can certainly add up over time. I'd rather not give that away. Thanks again.

rosylenm

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Re: 403b Contributions
« Reply #6 on: September 19, 2016, 01:15:09 AM »
Maybe check out 403bwise.com?  I have the same problem at my workplace, but sometimes it takes a month for contributions to post to my account (deposit for June 30th paycheck didn't post until July 30th).  It's messed up for sure, but I think, from what I have read on (bogleheads and 403bwise), healthcare employer has until the 15th of the following month to make the contribution.  Timeline might be different for schools.

Jet9

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Re: 403b Contributions
« Reply #7 on: September 19, 2016, 02:26:23 PM »
Thanks for the 403Bwise tip; I'll check it out!