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Random 401k thing. A couple of years ago, my employer stopped giving our 401k employee match in each paycheck

Posted by ty97 Oct 20 '17, 08:30

Rather, you get a lump sum at year end of your matching for the year.

This is annoying because
A) lack of dollar cost averaging
B) I get the money anywhere from 1/2 month 11 1/2 months later than I would have before.

But it's a pretty cool bump to see when it hits.

Responses:

so they amended the plan to go to a Yearly match, technically they have to put that money in within 90 days - tRuMaN Oct 20, 08:32 4
- isn't it 90 days from the filling of the corporate tax return? -- nm - decline Oct 20, 08:39 2
  - I dont think so, but I could be confusing that with another penalty. I only had two plans that did non-payperiod matches, and both made their year - tRuMaN Oct 20, 08:42 1
    - I just double checked. In order to apply the match to the prior year, it must be funded prior to the tax filling (probably why you saw it in March) -- nm - decline Oct 20, 08:51
- I know nothing about this. I just know I get a lump into my 401K around 12/31 every year. -- nm* - ty97 Oct 20, 08:36
hmmm, why would they defer until the end of the year? -- nm - prayformojo Oct 20, 08:32 16
- couple of different reasons - decline Oct 20, 08:35 3
  - got it. thanks -- nm - prayformojo Oct 20, 08:39
  - true, but on 2 - they can use that money to offset the employer contributions, so thats really a wash really. -- nm - tRuMaN Oct 20, 08:36 1
    - it is, but it also becomes a cash-flow benefit -- nm - decline Oct 20, 08:37
- A) They get to keep the money all year and make money off of it, rather than handing it out -- (edited) - ty97 Oct 20, 08:35 10
  - Your IM is basically why we acrue vacation days and don't get them in our "account" as a lump sum at the start of the year. In IL if you leave, you - oblique, SuperFeud Champion and Tenth Astronaut Oct 20, 08:40
  - you IM depends. The plan must specifically state the end-of-year requirement -- nm - decline Oct 20, 08:36 5
    - 99.999999% sure it does -- nm - ty97 Oct 20, 08:37 4
      - Do you know the least time I read my plan docs? - ty97 Oct 20, 08:37 3
        
        just grab your Summary Plan Description (it's probably on your plan's website or your company's intranet) -- nm - decline Oct 20, 08:38 2
        
        As I mentioned, my father used to work for the company, and he'd read this stuff voraciously. - ty97 Oct 20, 08:44
        
        werd. -- nm - tRuMaN Oct 20, 08:38
  - oooh, your im is sneaky. I would of assumed they would of had to pay that out -- nm - Beaker Oct 20, 08:35 2
    - Might depend on the plan. I think my old plan still gave you your match even if you’d left. -- (edited) - znufrii Oct 20, 08:37
    - I'm *pretty* sure they don't, not 100% - ty97 Oct 20, 08:36
- cash flow management maybe? money they don't payout is money they earn interest on / don't have to pay interest on -- nm - Beaker Oct 20, 08:32
many employers do this now. It saves them money in the long run -- nm - decline Oct 20, 08:31 3
- yup, though its a lot more of a compliance headache (as that calculation will get beat up during the plan audit). -- nm - tRuMaN Oct 20, 08:33 2
  - yeah, we deal with it all the time -- nm - decline Oct 20, 08:36 1
    - i spent most of May through Oct 15 auditing pension plans, so yeah good times. - tRuMaN Oct 20, 08:38

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Random 401k thing. A couple of years ago, my employer stopped giving our 401k employee match in each paycheck

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