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Q: 401K Plans ( Answered,   2 Comments )
Subject: 401K Plans
Category: Business and Money
Asked by: willy32465-ga
List Price: $2.00
Posted: 17 Aug 2006 16:08 PDT
Expires: 16 Sep 2006 16:08 PDT
Question ID: 757135
When is an employer who matches employees contributions to a 401K plan
required to actually deposit the funds into the employees account? e.g
monthly, quarterly, annually.
Subject: Re: 401K Plans
Answered By: denco-ga on 17 Aug 2006 16:58 PDT
Howdy willy32465-ga,

The 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?"

"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

Looking Forward, denco-ga - Google Answers Researcher
Subject: Re: 401K Plans
From: nelson-ga on 17 Aug 2006 16:26 PDT
I don't know the law, but since it is YOUR money, I would be leery of
any employer who does not deposit it with each paycheck.
Subject: Re: 401K Plans
From: ubiquity-ga on 18 Aug 2006 13:15 PDT
"I don't know the law, but since it is YOUR money, I would be leery of
any employer who does not deposit it with each paycheck."

Saying the money is yours is not entirely accurate.  It is not yours
until it vests.  And although it might then be yours, you are still
subject to your plan's restrictions.

Firms usually post the 401k funds pretty quickly.  Why? because if the
firm goes under, those that are responsible for making the 401k
payments may be help liable in some regard under state law and ERISA.

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