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Old 08-09-2009, 01:19 PM   #21
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Originally Posted by WanderALot View Post
Same thing happened at my company about 4 months back. Additionally, they are behind about 4 months in sending in my contributions (ie MY money, not the match!) I stopped my 401k and nearly quit (had another job lined up), but decided to stay after a promise to catch up by the end of the year. We'll see.
Hey, not to butt into your business, but you'd better keep a real close eye on this deal. Your employer is breaking the law unless the law has changed recently. They cannot hold your money. Hopefully you will be able to recover these funds.
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Old 08-09-2009, 02:45 PM   #22
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I agree with the other folks, WanderALot. That is actionable if my understanding of employment law is correct.

I would be totally freaking out about this. It is the same thing as not sending in the employment taxes. You need to tell someone at the company that you are putting in a call to the Employment Securities folks in your state if it isn't resolved immediately. The federal law that covers this says that your contributions should be sent in within a "reasonable time" which is understood to be within 2 weeks and 4 weeks from the payroll withholding date.

I know personally of a company fined for this practice, and they were only late by a week or so beyond the 4 weeks.
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Old 08-09-2009, 05:44 PM   #23
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As others are saying........ A company can (and these days it's common) cut 401k matching. But they can't hold the money you contribute to the 401k plan. I'd dig into that very quickly as there is no good excuse.......
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Old 08-09-2009, 09:22 PM   #24
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Last year DH's company got into trouble with the feds on their plan and had to close it, so we spent an entire 12 months with no 401k plan for him. Really made me mad.
Fast forward to this year--I find out that the multiple employer plan we have is going to be closed because of some shenanigans of one of the other employers...my plan is closed! Losing $7k of deferrals this year (and the match, of course) and won't be able to contribute to the new one until Sept 2010.

Believe me, losing the 401k entirely sucks way more than losing the match. But I share your irritation.
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Old 08-10-2009, 09:22 AM   #25
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Unfortunately in a job market like this one, employers can screw their workers and get away with it. One can only hope the ones that do so when it's not a matter of corporate survival get their comeuppance when the economy turns and the market once again becomes a job seekers' market and they find their best people leaving in droves. Feels like a long ways away, but you never know.
You're right about that, but what will probably happen is that you're going to leave your company for mine, not knowing that I was getting screwed during the hard times, and I'm going to jump to yours, not knowing you were getting screwed.
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Old 08-10-2009, 09:30 AM   #26
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You're right about that, but what will probably happen is that you're going to leave your company for mine, not knowing that I was getting screwed during the hard times, and I'm going to jump to yours, not knowing you were getting screwed.
True -- but in both cases, these businesses have to eat the costs of recruiting and training new hires, whereas a business that has earned some employee loyalty may not.
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Old 08-10-2009, 10:38 AM   #27
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You're right about that, but what will probably happen is that you're going to leave your company for mine, not knowing that I was getting screwed during the hard times, and I'm going to jump to yours, not knowing you were getting screwed.
As one looking for a job with better compensation, I would be looking at companies that have a 401k, and a match, and actual benefits instead of places where you get compensated like an independent contractor plus the employer pays their share of payroll taxes (which is how my current firm basically ended up after all the cuts).
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Old 08-11-2009, 07:26 PM   #28
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Isn't the company legally obligated to deposit the money by the 15th of the month following the contribution? For example, if you made a contribution on January 1 the contribution must be deposited in the 401(k) by February 15th. Sounds like your company is (or was) breaking the law.
Absolutely. I believe IRS regulations require they be submitted in 90 days though. I've brought it to them twice and they pretty much admitted it. I don't see any benefit to reporting them especially since it looks like we got a few contracts approved and have some breathing room. They've promised that they will start catching up starting at the end of this month and will finish by October. I've already cut my loss and quit contributing, but if they don't catch up by Nov, I'm outta here.
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Old 08-12-2009, 11:36 AM   #29
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Wander, I promise that is a complete untruth. It is 2-4 weeks. Period.

Please call the Department of Labor. They will confirm that the IRS says that your contributions mush be made within "a reasonable time" which has been shown in specific cases to be less than 4 weeks.
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Old 08-12-2009, 11:40 AM   #30
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Originally Posted by WanderALot View Post
Same thing happened at my company about 4 months back. Additionally, they are behind about 4 months in sending in my contributions (ie MY money, not the match!) I stopped my 401k and nearly quit (had another job lined up), but decided to stay after a promise to catch up by the end of the year. We'll see.
What they are doing is illegal. They can't just catch-up, or be behind. The money is not their's to hold. I'd file a complaint with the IRS and the company handling the 401K. Its fraud as well, and maybe you can sick the local police on them. Sounds like they see you as a push-over and you're readily accepting that role.
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Old 08-12-2009, 02:34 PM   #31
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Department of Labor would be all over this, I agree.
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Old 08-13-2009, 02:04 PM   #32
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Thanks for info! I know it's not legal for them to do this. I've long stopped my 401k contribution. I don't *think* they are seeing me a pushover since I was the first to complain and instigated others to stop their 401ks. No one else seemed to care ("at least I have a job" was one of my coworkers response). But who knows.

BTW, it wasn't them who said 90 days, I thought I read it online. I told them that I thought breaking the law by not contributing the amount within 90 days.

I will be complaining to the DOL if they don't at least start catching up by the first week of next month.
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Old 08-13-2009, 02:46 PM   #33
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The DOL is very helpful. A former boss sees the light and it includes the hotline number (from 2002 at least)
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Old 08-19-2009, 02:50 PM   #34
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Absolutely. I believe IRS regulations require they be submitted in 90 days though. I've brought it to them twice and they pretty much admitted it. I don't see any benefit to reporting them especially since it looks like we got a few contracts approved and have some breathing room. They've promised that they will start catching up starting at the end of this month and will finish by October. I've already cut my loss and quit contributing, but if they don't catch up by Nov, I'm outta here.
The rule is that they have to get your contribution into the plan as soon as practicable, but no later than 15 business days after the payroll date. That "soon as practicable" is as little as 3 days if your firm has electronic payroll (which nearly all firms do these days).

There are big penalties for noncompliance. If your plan has more than 100 participants then it requires an annual audit - the auditors would be all over this too.

An anonymous call to the DOL (not the IRS) would likely produce results if they don't start catching up soon.
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Old 08-27-2009, 08:08 PM   #35
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Sorry to hear about the cut, but it seems like many companies are having to scale back benefits in order to remain competitive. It reminds me of this Onion article I recently read, the author doesn't happen to be your boss, does he?

We've Got Some Great News For Those Employees Who Hate Our 401(k) Matching Program
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Old 09-04-2009, 04:18 PM   #36
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Unfortunately in a job market like this one, employers can screw their workers and get away with it. One can only hope the ones that do so when it's not a matter of corporate survival get their comeuppance when the economy turns and the market once again becomes a job seekers' market and they find their best people leaving in droves. Feels like a long ways away, but you never know.
For an employer not to provide certain benefits may or may not be competitive, but it is not "screwing their workers": who are free to move on to a different job, if they think they can get better terms elsewhere.

Some businesses choose to pay above market rates, hoping that it will buy some extra effort and/or loyalty. That is their choice, and it is certainly a legitimate strategy. But let's not waste time or energy demonizing those employers who choose otherwise: that's just promoting an unrealistic sense of entitlement.
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Old 09-04-2009, 07:11 PM   #37
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I agree that dropping the 401k match as a cost cutting measure is not necessarily "screwing their workers" but if the workers were enticed to join the company on the strength of the wonderful match program (unlikely) then it could be. I know of a company who paid lower than average salaries but used generous stock options to convince workers to join. When the economy soured, just before many options vested, they instituted mandatory 8AM desk checks, mandatory 7PM desk checks, required attendance on Saturdays and used "at will employment" rules to dump anyone who didn't play along - in most cases before the bulk of their options vested. Employees who did want to leave found finding new employment more difficult than usual because of the economy. Yes, some companies can and do deliberately take advantage of the economy to screw workers.
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Old 09-06-2009, 11:27 AM   #38
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For an employer not to provide certain benefits may or may not be competitive, but it is not "screwing their workers": who are free to move on to a different job, if they think they can get better terms elsewhere.

Some businesses choose to pay above market rates, hoping that it will buy some extra effort and/or loyalty. That is their choice, and it is certainly a legitimate strategy. But let's not waste time or energy demonizing those employers who choose otherwise: that's just promoting an unrealistic sense of entitlement.
these companies certainly are screwing their workers. an expectation of a decent retirement after a career of dedicated service to one's company is not an 'unrealistic sense of entitlement'.

the american worker is putting in longer hours for lower pay and fewer benefits (adjusted for inflation), while execs are seeing obscene increases in salaries and other bonuses. very few businesses pay above market rates in salaries for the jobs most americans have.
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Old 09-06-2009, 12:43 PM   #39
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For an employer not to provide certain benefits may or may not be competitive, but it is not "screwing their workers": who are free to move on to a different job, if they think they can get better terms elsewhere.
Changing the terms of a retirement plan is messing with their employees. IBM found that out in 2003 when a judge told them that changing their retirement plan for existing workers was illegal. Many workers stuck with IBM for the retirement plan and it was illegal to change it on them.
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Old 09-06-2009, 12:47 PM   #40
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For an employer not to provide certain benefits may or may not be competitive, but it is not "screwing their workers": who are free to move on to a different job, if they think they can get better terms elsewhere.
Legal or not, I think it's shady. For one thing, once you've put enough time into a certain job, you can't easily just up and go somewhere else and lose all that seniority you earned. Not many people who have put in 20 years somewhere -- with the 4-5 weeks of vacation among other things -- isn't likely to want to become low person on the totem pole and get 1-2 weeks off again, and that assumes such an employee would not face rampant age discrimination if they went looking elsewhere (and be first on the chopping block in terms of layoff actions).

Frankly, changing the retirement deal on existing workers is pretty slimy whether it's legal or not. At least part of the reason they chose their employer and to stay with an employer was that the deal they made encouraged longevity and retention. It's poor business ethics to do otherwise unless it's a clear and present threat to survival.
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