• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Employer retaining employer contributions/company match for up to 9 months

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

warrent

Junior Member
What is the name of your state?What is the name of your state?What is the name of your state?What is the name of your state?What is the name of your state?What is the name of your state? Maine.

My employer has both defined benefits (401(a)) & defined contributions plans (403(B) - analogous to 401(k) for non-profits). When they froze the old defined benefits plan and created the new 401(a), the also made changes to the 403(b) where they no longer will fund the company match each payperiod as they had been doing and will put those company matches in when they do the contribution to the 401(a). We were told that both would go in at year-end. Not having seen the funds, I checked and have been told by our HR dept that legally, they have until Sept to fund both plans for last year (2005). They claim that they must wait until Payroll closes its year-end processing and hope to fund both plans sometime in Feb.

Despite not having been honest with its employees where they should have told us that the funds won't go in at year-end, this is an opportunity for an organization to hold onto a sizable amount of funds for an extended period of time (up to 9 months) with interest that benefits the employer and not the employee. The unoffical response from my employer is that this removes the employee from the fluctuations in the stock market (but that is the risk we have to accept with a defined contribution plan). The way the stock market is going, I am becoming increasingly angry that I do not have these funds to invest with. My general question, are they within their legal rights to do what they are doing and what recourse do I have at this time?
 


cbg

I'm a Northern Girl
I hate to be the one to break it to them, but September was quite some time ago.

Are we talking about employee deductions, or employer matches to employee deductions? It makes a VERY big difference.
 

warrent

Junior Member
What they are saying is they have until Sept. 2006 to put the employer match in to the defined contribution plan as well as the employer contributions to the defined benefit plan for 2005.
 

cbg

I'm a Northern Girl
They MAY be right on the employer matches - that will depend on how the plan document is written.

Employee contributions must be made as soon as is reasonably possible, with 15 days being preferred as the absolute outside. (Occasionally there are circumstances where it can legitimately take longer than that, and as long as the need is legit it's okay.) But I can't even begin to imagine that the DOL would agree that a nine-month wait is a legitimate as-soon-as-possible.

Failure to fund employee contributions properly is something employers go to jail for. Contact the US DOL.
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top