Failure to Defer 401k Contributions

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archbish99
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Failure to Defer 401k Contributions

Post by archbish99 » Fri Jan 12, 2018 1:29 pm

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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Joined: Fri Oct 12, 2012 3:55 pm

Re: Failure to Defer 401k Contributions

Post by 123 » 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.
The closest helping hand is at the end of your own arm.

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oldcomputerguy
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Re: Failure to Defer 401k Contributions

Post by oldcomputerguy » Fri Jan 12, 2018 1:39 pm

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.
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

johnubc
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Re: Failure to Defer 401k Contributions

Post by johnubc » Fri Jan 12, 2018 1:42 pm

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 » 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?)
I'm not a financial advisor, I just play one on the Internet.

z91
Posts: 248
Joined: Fri Mar 07, 2014 1:19 pm

Re: Failure to Defer 401k Contributions

Post by z91 » Fri Jan 12, 2018 2:31 pm

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 » Fri Jan 12, 2018 2:56 pm

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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