Each Wednesday 401kBasics posts a new article in a weekly series called “Keep the Course”. This series is designed to give the average consumer information on how to keep their 401k plan on track! . Your feedback or suggestions on future articles is welcome. Be sure to check out the first article on enrolling in the 401k plan.
It happens more often than you would think—employers misusing or stealing from your 401k contributions.
If you read our first article of the Keep the Course series https://401kbasics.wordpress.com/2010/08/19/keep-the-course-dont-let-that-enrollment-kit-scare-you—4-easy-steps-to-get-started-on-your-401k/ then you’ve already enrolled in your 401(k) plan. But don’t leave it at that! Review your account on a regular basis to ensure that your 401k contributions are being deposited into your account in a timely manner. The regulations depend on the size of your company, but generally speaking.
- Small employers (less than 100 employees), should deposit your contributions into your account within 7 business days of date you would have been paid the funds if not deferred into the plan.
- Larger employers, (over 100 employees), should deposit contributions at the very latest by the 15th business day of the month following the month it was deducted in.
For assistance in monitoring your account, the DOL has also provided 10 warning signs to look out for:
- Your 401(k) or individual account statement is consistently late or comes at irregular intervals
- Your account balance does not appear to be accurate
- Your employer failed to transmit your contribution to the plan on a timely basis
- A significant drop in account balance that cannot be explained by normal market ups and downs
- 401(k) or individual account statement shows your contribution from your paycheck was not made
- Investments listed on your statement are not what you authorized
- Former employees are having trouble getting their benefits paid on time or in the correct amounts
- Unusual transactions, such as a loan to the employer, a corporate officer, or one of the plan trustees
- Frequent and unexplained changes in investment managers or consultants
- Your employer has recently experienced severe financial difficulty
This is your money! Hold your employer accountable, review your account regularly and make sure your contributions are being deposited into your account in a timely manner!
Source: http://www.dol.gov/ebsa/publications/10warningsigns.html
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