When should an employer put contributions into a 401(k) plan?

Question:

I was recently laid off from a company that ceased to do business immediately thereafter. Upon receipt of my final paycheck, I discovered that the reported 401(k) contributions on that stub do not match the actual contributions to the fund management company; my fund is $600 short. What are the requirements for how and when the 401(k) money gets deposited to the fund?

Answer:

Salary deferral contributions to 401(k) plans are required to be deposited into the trust -- that is, the plan account -- no later than 15 business days after the end of the month in which the salary was paid. An employer who fails to make a timely deposit would be subject to penalties.

And the money you lost can come directly from your former employer's pocket. According to the law, plan fiduciaries -- those, like your employer, who are responsible for safeguarding plan assets -- are personally liable for transgressions.

Talk to a Lawyer

Need a lawyer? Start here.

How It Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you

Legal Information & Books from Nolo

NOLO-web2:DRU1.6.12.2.20161011.41205