Is there any law that specifies how long an employer has to put your money into your 401k after deducting it?

Question

My employer makes bi-weekly deductions from my pay check based on the amount I specify. He then holds that money (and presumably my other coworkers' contributions) for several months before sending it to be deposited into my 401K account. This sounds illegal to me. What if the stock market surged and all my money wasn't in my account to take advantage of it?

Answer 1

Within the calendar year !

Read here :
The WomensFinance.com website has a Frequently Asked Questions (FAQ)
page on 401(k) issues. There might be legal reasons a company would
do a deposit other than with every paycheck, such as annually.

"Is there a rule about when an employer has to deposit matching
contributions into the 401(k) account?"
http://www.womensfinance.com/wf/401k/contribution.asp

"Each 401(k) plan has its own rules regarding the timing of employer
contributions. Some employers make contributions every pay period,
while others only make them once a year. You should check the Summary
Plan Document, available from your HR or benefits representative, to
see what rules govern your plan.

Generally, employer contributions must be made within the tax-filing
period for the calendar year in question. So an employer would have
until at least April 15 of any given year to make the contribution
for the previous year (or possibly longer, if the employer files for
an extension). If the employer's contributions are discretionary
(linked to company performance) they are generally deposited only
after the company's performance for the previous year is assessed."

If you need any clarification, please feel free to ask.


Search strategy:

Google search on: employer 401k contributions deposit
http://www.google.com/search?q=employer+401k+contributions+deposit

Answer 2

I know in 401k that I participated a few years back they were to contribute monthly. I found this out by going directly to the investor and asking them. Some plans are quarterly and others are monthly to the best of my knowledge. You should have an account number and the phone number for the company that invests the money, they will know the answer.

Answer 3

yes there is a time limit, it may be weeks. shoul not be months. keep trake of your deductions an when they appear. ask HR what the hold up is! the plan administrator should tell you the guildlines on the plan. the squeeky wheel gets the oil.

Answer 4

Read the rules and regulations regarding your specific 401(k) plan. They must disclose this upfront.