401K defferals never put in fund

What is the name of your state?

California



I have had 401K deferrals coming out of my pay 2 times a month for over a year. I went online to see what I had in there, and discovered that only one or two payments had been invested in the funds set up by the financial advisor who set up the fund.

When I questioned my employer, she said that the money is being "held" and will be put in at the end of the year . Is this legal? Is this the way it is supposed to work.

It is important to note that I am not talking about what SHE contributes...I am talking about money that is coming out of MY check 2x a month. It seems to me that if she was just going to hold on to it for a year, why would I have done it...why not put it somewhere where it could have at least earned interest.

And, to further complicate things, she fired me last week, and indicated that my 401K will be paid out "later this year"! So, when I go somewhere else to work, I can't even roll over my 401K, because there is nothing even in there!

Please advise!

No, that is not how it's supposed to work. While I suppose the terms of the plan might permit this, I've never heard of a plan that holds funds till the end of the year, and while I'm not a 401k expert, I don't believe that is legal. To the best of my knowledge, these funds have to be deposited as soon as is reasonably possible, with two weeks being standard.

You can file a complaint with the US DOL. I don't have the phone number offhand but I think Beth does.

I agree, cbg. It's been a year or so since I reviewed EGTRRA which made some revisions to 401(k) reg's but to the best of my recollection, it requires that the employee contributions (and any employer match) be forwarded to the investment advisor within two weeks.

te1220, I suspect your employer is diverting employee contributions into the general assets of the company. I suggest you contact the DOL immediately. 202-693-4650