Author Topic: 401K contributions kicked back  (Read 670 times)

postvmvs

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401K contributions kicked back
« on: March 30, 2022, 06:09:43 PM »
I received a large (>$10k) check unexpectedly in the mail from my company's new 401K provider. We have been with this provider for only part of this year. Logging in to my account I see that this was a withdrawal for "excess contribution" from my account. I don't really see how this is possible as the payroll company always stops the 401k deferral at the appropriate limit, $19,500 for me last year, for example. I have been calling and calling the provide to try to get resolution, and am being told "it is being researched".

Is there any way that this is legitimate, or am I correct in my assumption that this was done in error?

secondcor521

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Re: 401K contributions kicked back
« Reply #1 on: March 30, 2022, 06:15:50 PM »
They're probably right, but they owe you an explanation.

You might be an HCE.  https://smartasset.com/retirement/401k-highly-compensated-employee

postvmvs

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Re: 401K contributions kicked back
« Reply #2 on: March 30, 2022, 06:37:06 PM »
So if the other employees aren't putting enough money in, I can't actually put the 401k maximum of $19,500?

I made less than $130K last year, so I don't think I qualify as a HCE? I'm an engineer, not a manager or executive.

Getting most of my contribution for 2021 kicked back makes it very hard to save for retirement.

secondcor521

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Re: 401K contributions kicked back
« Reply #3 on: March 30, 2022, 08:02:35 PM »
Yeah, that's the gist of it.

I don't know the exact rules of who is an HCE and who isn't.

Consider an IRA contribution or taxable investments.

maizefolk

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Re: 401K contributions kicked back
« Reply #4 on: March 30, 2022, 08:05:04 PM »
Is it plausible you're in the top 20% of earners at your company? That's another route to being a HCE.

 

Wow, a phone plan for fifteen bucks!