401k contribution year question

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With 401k contributions, the date that counts is the day they're withheld from your paycheck, and not the day they're deposited in the actual 401k account, correct?

Longer story: On July 1, my company switched from a totally adequate payroll provider to stupid dumpster payroll provider. I work for a big multinational corporation and I'm sure they have reasons, but those reasons have caused a pain in my backside several times already, and my convenience is the most important thing here.
With the old provider, 401k contributions were deposited in our accounts on payday. The new one? A week later. Usually. Sometimes 4 business days, sometimes 7 or 8. This is particularly annoying because the last paycheck of 2021 was on 12/31, and wasn't deposited into the 401k account until 1/7. New provider can't or just doesn't truncate the last contribution to keep us under the limit for the year, so now I'm $50 over for 2021 (I assume).

Lazy me kind of just wants to wait till the W2 comes out. But that will end up making me have to do twice as much work to fix, right?

[SimpleCycle]

It's the day they are deducted from your paycheck, not the day they are deposited.

I'm sorry your payroll provider sucks so bad!  That's annoying.

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It's the day they are deducted from your paycheck, not the day they are deposited.

I'm sorry your payroll provider sucks so bad!  That's annoying.

Thanks! Time to go talk to the payroll person. 

It's really only moderately inconvenient, but I appreciate that strangers on the internet feel my (minor) pain.

[charis]

We have the same issue. It's ranged everywhere from two weeks to two days. I don't get it!

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We have the same issue. It's ranged everywhere from two weeks to two days. I don't get it!

I know, right? What are they doing with our money in the mean time? Are there paper checks being carried by unreliable bicycle couriers or something?

[travel2020]

I know, right? What are they doing with our money in the mean time? Are there paper checks being carried by unreliable bicycle couriers or something?

More likely earning interest for the payroll provider. Banks seem to do this as well where money is deducted from the sender account right away but doesn’t show up for several days in the receiver’s account.

[Joel]

As someone who has been through  several 401k plan audits, your employer is required to submit 401k contributions timely. If it used to happen quickly and is now significantly slower, they could potentially be liable for interest owed to all employees.

I don’t know how an employee would necessarily complain, but our auditors have always messaged to us something along those lines. There’s not a clear deadline but payment history is factored in and it’s supposed to be “as quick as administratively feasible”. For my company, that used to be around 7 days but now that cutoff is closer to 3 days.

[dot]

As someone who has been through  several 401k plan audits, your employer is required to submit 401k contributions timely. If it used to happen quickly and is now significantly slower, they could potentially be liable for interest owed to all employees.

I don’t know how an employee would necessarily complain, but our auditors have always messaged to us something along those lines. There’s not a clear deadline but payment history is factored in and it’s supposed to be “as quick as administratively feasible”. For my company, that used to be around 7 days but now that cutoff is closer to 3 days.

When you say "required to," who is doing the requiring? I'd really like to figure out who to complain to. I don't know if a complaint will help, but it's a significant change, and it feels almost incompetent sometimes.

Today's fiasco: whoops, no 401k deductions from anyone's check this week. We'll double up on the next one. Hope you're good at managing money this month!
Something similar happened last summer, when 401k deductions were about half (but not consistently) in one pay period and were made up on the next one.