Author Topic: Advanced 401k question  (Read 3977 times)

iamsoners

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Advanced 401k question
« on: May 15, 2012, 09:13:30 AM »
I'm going to throw this out there for those of you that have super-skillz.  I just left an employer.  The employer usually pays the employer portion of the 401k (it's actually a 403b) contribution (6%) at the end of the quarter.  It's now over a month and a half since I left the company, and since the quarter has been over, and the matching payments haven't been paid out.  I've spoken to others still at the company and it turns out the company hasn't paid out to anyone and is now claiming they only HAVE to do so on a yearly basis.  I would really like to get the process moving of rolling my money out of the account and into one with better options but I can't do that until this payment is made.  So, two questions:

1. Is there a mandatory time by which an employer must pay out to an employee that has left the company?  I have searched the IRS website for this several times but don't see anything.  Presumably they can't just hold an employee's cash forever?

2.  Is it possible to roll-out my current balance, leave the 401k account open to receive the final match and then do an additional roll-over at that time?  Does anyone have any information on this?

Thanks in advance!

TLV

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Re: Advanced 401k question
« Reply #1 on: May 15, 2012, 12:59:00 PM »
For matching payments, I don't think there's much you can do. I know for many companies the match starts out unvested - if you quit before you've worked there a certain number of years, you don't get any of the match (or perhaps a percentage of the full match based on how long you were there).

Similarly, for an ESPP (a program where you have money withheld from your paycheck, and every period (eg 3 months) you get to buy company stock at a discount), if you leave the company mid-period then you only get back your contribution - you don't still get the stock discount.

Secret Stache

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Re: Advanced 401k question
« Reply #2 on: May 15, 2012, 02:22:53 PM »
If you meet the vested requirments of the plan then that money is owed to you.  By them not paying, it is effectively stealing.  I would follow up with HR first and determine what their plans are.  You may have to wait it out but will be worth it in the end.  If it appears they will try to avoid this payment then report them to the Department of Labor. 

Disclaimer:  I am not a financial or labor law expert and if they will not work with you, you should consult a qualified professional
« Last Edit: May 16, 2012, 12:43:09 PM by Matt »

Dicey

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Re: Advanced 401k question
« Reply #3 on: June 17, 2012, 04:29:53 PM »
Water under the bridge, man. If you didn't work this out before you left, they're unlikely to do you any favors now. Chalk it up to experience and shift your focus forward. Best of luck to you in your new gig.

ShavinItForLater

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Re: Advanced 401k question
« Reply #4 on: June 25, 2012, 01:44:53 PM »
I don't know the specifics of your employment, but I think it's common that employer 401k matches are written as something that can be terminated at any time (which would also imply that they could change the terms, such as only paying out yearly).  My employer's 401k match policy is written that way--in a bad year, they can just decide not to pay it.

I tend to agree that you're not going to see a dime, and would suggest you just move on.  I really don't think disputing it is likely to work out in your favor, and is probably not worth the hassle and expense to fight.

iamsoners

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Re: Advanced 401k question
« Reply #5 on: September 25, 2012, 01:21:51 PM »
Thanks for the comments everyone.  They eventually paid out 4 months after I left the company.  They didn't match to the existing employees during that time as well and I think the furor finally got loud enough.

umm, also, never a good sign about the financial health of an organization when those type of shenangins start.  glad I got out when I did.

Pylons13

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Re: Advanced 401k question
« Reply #6 on: September 30, 2012, 08:18:17 PM »
I am a CPA who does 401(k)/403(b) audits.  There is no IRS/DOL rule that governs this, it's all spelled out in the plan document, which acts as a contract between the Plan and the participants.  The Plan document is not a public document, but is available to plan participants (defined -generally - as anyone who has a balance in the plan) upon request.  Plans can be structured that you have to be employed at the end of the year/quarter in order to receive the match, so don't be surprised if you're not eligible for it.