SIMPLE IRA contribution is missing

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Topic Author
heikejohn1
Posts: 64
Joined: Wed Apr 23, 2014 6:02 am

SIMPLE IRA contribution is missing

Post by heikejohn1 » Thu Apr 11, 2019 5:35 am

My husband has been funding his SIMPLE IRA with twice monthly deductions from his paycheck. In February of this year, his employer changed payroll providers.

Money was taken out of his check as usual, but the transfer to the investment company was skipped for one month.
We are getting the runaround, trying to trace the missing month of deductions.

What steps can we take to get this addressed?

We contacted the employer and the investment company. Employer insists they send the payment, investment company insists that they did not receive it.

Cranberry
Posts: 10
Joined: Mon Dec 10, 2018 10:12 am

Re: SIMPLE IRA contribution is missing

Post by Cranberry » Thu Apr 11, 2019 7:38 am

At Schwab, the employer receives a monthly "Master account" statement for a SIMPLE account. Each month starts with a zero balance, shows a one line deposit, then, for a single employee, a one line transfer to the employee account and a zero ending balance. This is for a one employee plan. One month Schwab accidentally also put someone else's deposit in my Master account, which showed up as a separate line item. Customer service was happy to move the money to the correct account, after I notified them.If your employer uses a similar arrangement, won't they be able to look at the Master statement, or it's equivalent?

Topic Author
heikejohn1
Posts: 64
Joined: Wed Apr 23, 2014 6:02 am

Re: SIMPLE IRA contribution is missing

Post by heikejohn1 » Sat Apr 13, 2019 5:56 am

The problem is: his company uses a payroll provider. They changed to a different one. That messed up the automatic transfer to the investment company.
His employer only sees the monthly payment to the payroll company. During the change-over one month never made it to the investment company. Either the old payroll provider did not send it, or the new one did not.
I see the missing month, the investment company sees the missing month, employer does not see any missing payments to the payroll company.
There is one month withdrawals from my husbands paycheck somewhere with one of the payroll companies.
What to do?

Spirit Rider
Posts: 10310
Joined: Fri Mar 02, 2007 2:39 pm

Re: SIMPLE IRA contribution is missing

Post by Spirit Rider » Sat Apr 13, 2019 2:34 pm

It does not matter who is to blame. The "buck" (literally) stops with the employer.

They are the ones who as of 3/31/19 for February 2019 SIMPLE IRA employee deferrals were in non-compliance with IRS and DOL regulations. Failure to deposit employee elective deferrals timely is a serious SIMPLE IRA plan error. There are specific correction requirements including directly from the IRS; "If you didn’t deposit employee elective deferrals timely, make an additional contribution of the earnings that the contributions would’ve accrued if they were timely contributed."

I would wait until May 1st and if the deferrals and corrective earnings were not deposited by 4/30. I would file an anonymous complaint with the DOL. The DOL are the real pitbulls of retirement plan regulation enforcement. They might be busy and take a while, bu they will not let go until they have extracted your pound of flesh.

SIMPLE IRA plans tend to fly under the radar. Even if you don't file a DOL complaint, don't let them just get around to fixing this by only depositing the missing deferrals. They must provide you with corrective contributions to make up for the deposits not being timely.

acunn
Posts: 169
Joined: Tue Mar 10, 2015 4:29 pm

Re: SIMPLE IRA contribution is missing

Post by acunn » Sat Apr 13, 2019 3:06 pm

if it is missing for your husband, then it is likely missing for every participating employee including the bosses. Ask them to check their statements. When they realize their money is also missing from the Simple they are more likely to be invested in finding the missing money for all of the employees. Also if your husband's paychecks are always the same and the deductions are the same it is harder to track. I have variable deductions based on their 3% being different each time so I could identify exactly what month was missing. Good luck!

Cranberry
Posts: 10
Joined: Mon Dec 10, 2018 10:12 am

Re: SIMPLE IRA contribution is missing

Post by Cranberry » Sat Apr 13, 2019 7:01 pm

How many employees work for this company?

Topic Author
heikejohn1
Posts: 64
Joined: Wed Apr 23, 2014 6:02 am

Re: SIMPLE IRA contribution is missing

Post by heikejohn1 » Sun Apr 14, 2019 4:39 am

About 30

Cranberry
Posts: 10
Joined: Mon Dec 10, 2018 10:12 am

Re: SIMPLE IRA contribution is missing

Post by Cranberry » Sun Apr 14, 2019 10:54 am

If there were only a couple of employees, it might be easier to clearly identify who has access to the bank statement and the plan administrator, whom no one has contacted yet.

I'm assuming the employer isn't scamming you. Is there any possibility that the employee your husband contacted has a job title indictating that he is responsible for this, but in fact he has no access to the statements, or contacts at the bank/plan admin, and, worse, doesn't know what he doesn't know?

Can your spouse directly contact the owner, and get names? Of course, if the person your spouse first contacted *was* the owner, that is unfortunate.
I hope your husband can reach a calm resolution.

Topic Author
heikejohn1
Posts: 64
Joined: Wed Apr 23, 2014 6:02 am

Re: SIMPLE IRA contribution is missing

Post by heikejohn1 » Tue Apr 16, 2019 3:31 am

We just received word from my husbands company.
Here is the reason of the missing deposit!!



"After a lot of sleuthing, we’ve discovered what happened.
Like all businesses, XXXXX is periodically the target of fraudulent check activity. It appears the check that was sent out for the February IRA contributions was stolen. It wasn’t deposited, and a check with the same check number made out to a person we don’t know was cashed at a bank a couple of days after our check was mailed. The bank refunded the money for the fraudulent check, but the IRA check is still missing.
I printed a replacement check for the February contributions as well as a check for the March contributions Friday. They will go in today’s mail. Those should both be deposited this week so check your account on Thursday or Friday. I’ll keep an eye on my IRA account too.
Sorry for the delay. Glad you called it to my attention or we might not have noticed until we went to reconcile the bank account. Occasionally the account manager at Wells Fargo checks in with me if a deposit seems late, but he is on the second week of his honeymoon, so I don’t think that was on the top of his list this month."


I'm happy that it will be resolved by the end of this week, but also horrified.... Paper Check???

autolycus
Posts: 213
Joined: Thu Jul 31, 2014 3:01 pm

Re: SIMPLE IRA contribution is missing

Post by autolycus » Tue Apr 16, 2019 7:29 am

I would definitely keep on top of the monthly deposits to make sure this really was a one-time thing. Stuff happens, and this is probably just stuff, but I’ve seen some really random bs excuses for late deposits. When it’s bs, “stuff” will happen again.

Why don’t they consider shifting to ACH for this transfer? Seems like it would be a positive for everyone.

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