Failure to Defer 401k Contributions

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archbish99
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Joined: Fri Jun 10, 2011 6:02 pm

Failure to Defer 401k Contributions

Post by archbish99 »

I switched jobs in 2017, and estimated the amount I would have contributed to my 401k at my previous employer when I started. (This was part of my new employee paperwork while I hadn't left my old job, let alone gotten my final paystub. I didn't have the actual number until later.) I realized that the number was too high when they stopped my 401k withholding with my next-to-last paycheck of the year before hitting the $18k limit. I immediately updated the amount with payroll, but no further contributions were withheld from my final paycheck.

Now Payroll says they're unable to modify contributions from a previous year; they either happened or didn't, so sorry. Do they/I have a way to fix this, and is it worth pushing on?
I'm not a financial advisor, I just play one on the Internet.
123
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Re: Failure to Defer 401k Contributions

Post by 123 »

No. 401k contributions have to be by payroll deductions. Never heard of any acceptable alternative. What's done is done.
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oldcomputerguy
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Re: Failure to Defer 401k Contributions

Post by oldcomputerguy »

123 wrote: Fri Jan 12, 2018 1:35 pm No. 401k contributions have to be by payroll deductions. Never heard of any acceptable alternative. What's done is done.
And, unlike with an IRA, you can't make 401k contributions in 2018 and designate them as being for 2017.
johnubc
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Re: Failure to Defer 401k Contributions

Post by johnubc »

Move on. It is too late to fix that.
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archbish99
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Re: Failure to Defer 401k Contributions

Post by archbish99 »

I'm not suggesting that it be by a method other than payroll contributions, but they failed to take the contribution I had elected from the paycheck. I had assumed that, if they're obligated to do so, there's also some method of correcting it if they fail to do so. (Or are they not actually obligated to take the elected contribution from my paycheck?)
I'm not a financial advisor, I just play one on the Internet.
z91
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Joined: Fri Mar 07, 2014 1:19 pm

Re: Failure to Defer 401k Contributions

Post by z91 »

archbish99 wrote: Fri Jan 12, 2018 2:28 pm I'm not suggesting that it be by a method other than payroll contributions, but they failed to take the contribution I had elected from the paycheck. I had assumed that, if they're obligated to do so, there's also some method of correcting it if they fail to do so. (Or are they not actually obligated to take the elected contribution from my paycheck?)
Ask them for the timelines. Typically payroll is run in advance (days, sometimes a week) and changes can't be made to 401k contributios 2-3 weeks prior. When I worked for a F100 their policy was two pay periods (1 month).
Spirit Rider
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Re: Failure to Defer 401k Contributions

Post by Spirit Rider »

t60 is correct. IRS regulations allow the employer reasonable administrative timelines. In fact a company is not required to allow a change in election more than once a year.

Lesson learned, move on.
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