Corporate games and my 401k....

A

armor99

Full time employment: Posting here.
Joined
Feb 24, 2007
Messages
741
Ok.... this one really gets me steamed. I would imagine that it would for everyone here on the retire early forums. The company that I work for has been playing games with my 401k money:rant:! I am currently putting in 12% every two weeks, and the company match takes it to around 14%. A nice chunk of change. They have their 401k with fidelity that I check online to verify payment. They just cannot seem to get their act together and deposit these funds on anything that resembles a regular basis. There is no fraud here.... I am not missing anything, but it seems that they do it in a manual rather than an automated way. I have spoken to the financial woman here several times about it. And I get answers like... she was swamped this week, technical problems, etc. I cannot believe that this company allows this sort of nonsense to go on. Currently they are late approximately 2 weeks, from the time my last 401k money was taken.
I have looked up the federal laws and ERISA... which says they technically have up until the 15th day of the next month to deposit the funds. Corporate america needs to stop playing with MY money.... (ok... rant is over...) Anyone else having problems like that:confused:
 
armor99 said:
Ok.... this one really gets me steamed. I would imagine that it would for everyone here on the retire early forums. The company that I work for has been playing games with my 401k money:rant:! I am currently putting in 12% every two weeks, and the company match takes it to around 14%. A nice chunk of change. They have their 401k with fidelity that I check online to verify payment. They just cannot seem to get their act together and deposit these funds on anything that resembles a regular basis. There is no fraud here.... I am not missing anything, but it seems that they do it in a manual rather than an automated way. I have spoken to the financial woman here several times about it. And I get answers like... she was swamped this week, technical problems, etc. I cannot believe that this company allows this sort of nonsense to go on. Currently they are late approximately 2 weeks, from the time my last 401k money was taken.
I have looked up the federal laws and ERISA... which says they technically have up until the 15th day of the next month to deposit the funds. Corporate america needs to stop playing with MY money.... (ok... rant is over...) Anyone else having problems like that:confused:
Click to expand...

It happens more than you think. I once had a job where we got our QUARTERL statement that showed ZERO investment, even though we had money taken out each month.

Turns out the owner needed cash flow to keep the business running, and "borrowed" from us employees without our knowledge to cover his shortfall. After some employees "reminded" him how illegal that was, he borrowed some money to make us "whole". Only problem was, we were "out of the market" for 6 months...........:p:bat:
 
That would burn me up. Do others know they are being screwed this way? How big is the company? DW once had a plan where the 401k summary plan description actually stated the deposits could be quarterly.....company was riding the float.
 
armor99 said:
Ok.... this one really gets me steamed. I would imagine that it would for everyone here on the retire early forums. The company that I work for has been playing games with my 401k money:rant:! I am currently putting in 12% every two weeks, and the company match takes it to around 14%. A nice chunk of change. They have their 401k with fidelity that I check online to verify payment. They just cannot seem to get their act together and deposit these funds on anything that resembles a regular basis. There is no fraud here.... I am not missing anything, but it seems that they do it in a manual rather than an automated way. I have spoken to the financial woman here several times about it. And I get answers like... she was swamped this week, technical problems, etc. I cannot believe that this company allows this sort of nonsense to go on. Currently they are late approximately 2 weeks, from the time my last 401k money was taken.
I have looked up the federal laws and ERISA... which says they technically have up until the 15th day of the next month to deposit the funds. Corporate america needs to stop playing with MY money.... (ok... rant is over...) Anyone else having problems like that:confused:
Click to expand...

Ok I'll bite as I am a Finance Manager and have responsbility for getting our 401k contributions in to the plan. It has taken me 18 months to train my staff to make it a habit of submitting our 401k contributions as soon as we have received the payroll file. In defence of your FM I can tell you, as for me, getting your 401k payments in the 1st day we have the numbers is not always our first priority. However, getting them in by the due is definitely a priority. Most Finance departments are run for the benefit of the employer rather than the employee. Whilst your 401k contribution might be number 1 on your list, I know for us we can have a list of 50 things that have to get done that are far more important.

As to automating, this would not likely be possible with Fidelity. My employer is with Fidelity and as automated as you can get is online submittal of the file and online payment. It would be impossible to have an automated system to make the payments as it is likely the 401k contributions change from payroll to payroll. It is possible there have been technical problems because in the 6 mos we have been with Fidelity they somehow forgot to withdraw funds from our bank account on 1 occasions and we do have issues uploading the file online.

So all I can suggest is take a chill pill, because every moment you spend on the phone bitching with your FM about your contributions, that is time you are taking away from them being able to complete another task and move your 401k contributions up the list.
 
My wife's company does the same thing. It might take 1 day and sometimes up to 5 weeks for the money to be added to her 401K plan (also with Fidelity) from the time she gets paid. The length of the delay is very random. The company she works for is a publicly traded company worth $1-2 billions.
 
My employer uses Fidelity as well, I always see my money go in on payday. Don't blame Fidelity, just blame lazy Finance Managers.
 
FinanceDude said:
It happens more than you think. I once had a job where we got our QUARTERL statement that showed ZERO investment, even though we had money taken out each month...........:p:bat:
Click to expand...
Hey, we must have worked the same place!?
Unfortunately, I was young and too trusting (and the owner was a real salesman). I went as far as 9 months without getting any of my contributions posted (illegal, yes, I know). I grew tired of the shenanigans and found another job. He promised the company match, but never followed through on it. About a year after I left, former co-workers found chains and a padlock on the door compliments of the sheriff. Justice.

I have learned to regularly check my account balances, review credit card bills, etc., almost to the point of being anal about it. I learned tho.
 
Thanks to everyone that posted. Nice to know that others have gone through this. This companies history is really interesting. They started out as a faily small company (<100 people). Then they got bought out around 4 years ago by a much larger company (~ 6000 worldwide). Slightly after is when I joined in. Last year out company was bought out again but a VERY large company. (100,000 +). Even though we are technically a VERY large company now, the management is acting much as they have before. After all, all of the management here is exactly the same. But from working in other very large companies, I know the sort of nonsense that goes on here will not last forever. I am guessing it will take 2 years for the larger parent company to fully assimilate us nad start to make much needed changes. I do not think that any of the management here has any idea what is about to hit them.
One of the nice side benefits of working for a really LARGE company is that they avoid any sort of liability at all costs. This means that eventually things here will have to be improved dramatically. Just not sure if I will be here that long... :) I remember talking to the finance woman here about the whole 401k thing. I mentioned ERISA (federal laws about 401k etc). She just gave me a blank stare.
 
I'm surprised that your personal decision is to work there.
 
youbet said:
I'm surprised that your personal decision is to work there.
Click to expand...

A very astute insight.... just biding my time and looking elswhere.... by this time next year I will most likely not be here anymore.... :)
 
armor99 said:
A very astute insight.... just biding my time and looking elswhere.... by this time next year I will most likely not be here anymore.... :)
Click to expand...

If you decide to move elsewhere, make sure you have accurate records on your 401(k) when/if you decide to move it to an IRA or another 401(k). When I left my last employer, it took weeks to get my $$$ moved to Vanguard...while my 401(k) from MegaCorp was moved within days.
 
FIREdreamer said:
My wife's company does the same thing. It might take 1 day and sometimes up to 5 weeks for the money to be added to her 401K plan (also with Fidelity) from the time she gets paid. The length of the delay is very random. The company she works for is a publicly traded company worth $1-2 billions.
Click to expand...

I guess I better stop being irritated when my mega-corp's posting isn't done at 9pm on the 15th and 30th. :eek:
 
I work as a bookkeeper for a company that has up to 12 paydays a month, 100 or so every Friday, 3 on Mondays and 7 on 15th and EOM. I send in the contributions on the 15th and EOM because it would be too much trouble to do more often and 15th and EOM is my payday. I don't even give anyone else an opportunity to say not to send it. I am sending 1,800 each payday for myself and want to see my money post. Yesterday I send in 15% extra for everyone as profit sharing except Friday people don't get profit sharing and aren't allowed in the plan except 3 of those people that are non union. I consider paying the 401K as important as meeting payroll.
 
Is it the company match or your deferral that is late? Or both?
The company has 3 days to deposit your deferral with the 401k, or the Department of Labor gets upset. Technically the rule is "as soon as possible, but no more than 15 days". The DOL takes the position that for most large companies with electronic payroll, "as soon as possible" = 3 days.

You could always have a friendly discussion with a DOL agent - that could get your employer's attention.
 
trirod said:
Is it the company match or your deferral that is late? Or both?
The company has 3 days to deposit your deferral with the 401k, or the Department of Labor gets upset. Technically the rule is "as soon as possible, but no more than 15 days". The DOL takes the position that for most large companies with electronic payroll, "as soon as possible" = 3 days.

You could always have a friendly discussion with a DOL agent - that could get your employer's attention.
Click to expand...


Wow.... thanks for the info Tripod. I looked at the ERISA guidlines and did not find anything like that. Can you find me where the 3 day rules are posted?
It is strange.... if anyones paycheck here was short by $500 one payday a full scale riot would break out. But somehow not the same attitude with the 401k money. Is that not MY money as well? I think the thing that so many people forget is that you are at your job for a salary. This place is not my family, I am no sense of obligation or commitment to them at all. I am here because I have decided to trade (willingly) 40 hours a week, for my current salary. If the company decides to start playing games with that agreement, then that will cause me to leave. It is a simple as that.
 
I've never had my contributions added to my account any later than payday and would never tolerate any different. There's no excuse. You mess will MY money and there will be serious consequences. Sounds like you need to find yourself a legitimate employer.
 
Well... I finally did it... I had enough of the nonsense, and decided to take a trip to our HR department. I let them know what my concerns were, that the payment was currently over two weeks late etc. I also let the HR woman know that they are dangerously close to violating ERISA laws because of it, that are federal. You know you are in trouble when the HR person is "not really sure" who is in charge of finance. And we are a HUGE company... it should not be very difficult. Supposedly because of our recent merger they are having problems sorting it out etc. Sorry... but that is not really my problem here. I even asked if I loose confidence in the companies ability to fund my 401k, can they take the money out, give it to me, and I will hand it over to Fidelity personally... That really got her attention! It probably does not show through on this posting, but I was extremely calm, and pleaseant though all of this. Repeated many times... not an attack, or anger directed at anyone... just the problem itself. We will see what might come of it...
 
I thought businesses were efficient and government was inefficient. Federal government (me) and state government (husband) has always had the money in the investment accounts on time. It is predictable and you can argue that the pay period ended before the pay check was drawn, but it is still every two weeks.
 
Our 401k deposits always hit 1 week after payday. It's a huge pain and really ticks me off, but they're legal, so I can't do anything about it.

This is a large company of 10k+ employees.
 
armor99 said:
Well... I finally did it... I had enough of the nonsense, and decided to take a trip to our HR department. I let them know what my concerns were, that the payment was currently over two weeks late etc. I also let the HR woman know that they are dangerously close to violating ERISA laws because of it, that are federal. You know you are in trouble when the HR person is "not really sure" who is in charge of finance. And we are a HUGE company... it should not be very difficult. Supposedly because of our recent merger they are having problems sorting it out etc. Sorry... but that is not really my problem here. I even asked if I loose confidence in the companies ability to fund my 401k, can they take the money out, give it to me, and I will hand it over to Fidelity personally... That really got her attention! It probably does not show through on this posting, but I was extremely calm, and pleaseant though all of this. Repeated many times... not an attack, or anger directed at anyone... just the problem itself. We will see what might come of it...
Click to expand...

Glad you are pursuing this, but just FYI, I found SEVERAL sites indicating the Dept of Labor guideline is 15th of the month FOLLOWING the month funds would otherwise be available <payday>, so that's a minimum of 15 days. This surprised me a bit, but here is one of the sources which is from 2005.........When 401(k) Contributions Go MIA
 
jazz4cash said:
Glad you are pursuing this, but just FYI, I found SEVERAL sites indicating the Dept of Labor guideline is 15th of the month FOLLOWING the month funds would otherwise be available <payday>, so that's a minimum of 15 days. This surprised me a bit, but here is one of the sources which is from 2005.........When 401(k) Contributions Go MIA
Click to expand...

Thanks for the info.... you have got to love it when you go visit your HR folks. They have the really nice offices reserved for execs, special parking spots, and the reality is.... most are completely clueless. If you are an HR person you should be fully versed in all of the federal guidlines etc. Or at least heard of them.
 
armor99 said:
Wow.... thanks for the info Tripod. I looked at the ERISA guidlines and did not find anything like that. Can you find me where the 3 day rules are posted?
Click to expand...

I'm not sure if they're posted anywhere, because the offical language is "as soon as possible". My understanding (from people who have been subject to DOL audits) is that the DOL's interpretation is that "as soon as possible" means no more than 3 days for companies with sophisticated payroll systems.
 
I think you will find that it is the 15th of the month after. Your employer can't be breaching any law, because if they were it would have been caught by the Plan Administrator. If so, your company would have received notification of how much each individual missed out on by not having their contributions paid on time and they would have been required to make up the shortfall.

It is mission impossible for your contributions to hit your account the day you get paid. I think some of you need a reality check. Even with online transfer, we have to submit the file, it has to come back as verified, we then have to submit payment, which if after a certain does not process the same day. The funds do not necessarily transfer to the recipient's account the same day either.

armor99, if I was your HR person and I had to put up with your complaints which by law are non-valid, by now I would certainly have you on my ****-list and I wouldn't be looking to do you any favours. I would be thinking that you had no work to do and had nothing better to do than worry about your 401k contributions. What you have to remember is it is HR who have input on how a plan should be made up. If they think it is too much trouble for them, they can easily influence vesting periods, matching contributions etc. so it might actually be worth your while to be nice to them.
 
Meeting Your Fiduciary Responsibilities

From the above link

Employee Contributions
If a plan provides for salary reductions from employees’ paychecks for contribution to the plan (such as in a 401(k) plan), then the employer must deposit the contributions in a timely manner. The law requires that participant contributions be deposited in the plan as soon as it is reasonably possible to segregate them from the company’s assets, but no later than the 15th business day of the month following the payday. If employers can reasonably make the deposits sooner, they need to do so.
 
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