Employer took Safe Harbor deductions from my check but I did not have a 401K

[christinaland7]

What is the name of your state? California. I worked for a company headquarter in Michigan but i lived and worked in California. On my paystubs I see a "Safe Harbor" deduction each paycheck (3% of my gross), but I never received any information for signing up for a 401K, or even told of the deduction. The employer laid me off - what is the status of that money? Am I able to get it back? What do I do? How do I roll it over or access it without a 401K account?

 

[PayrollHRGuy]

Have you contacted your former employer's HR department?

 

[FlyingRon]

Did you look carefully at the paystub? There are three sorts of safe harbor plans and the 3% amount you mention sounds very much like the "non-elective version of the plan. This means that the 3% is paid BY THE EMPLOYER. It likely shows up as an additional amount over your pay that is immediately excluded from taxability. You don't get the option to not consent to this.

The good news is that unlike employer matches in other plans, these vest immediately. So the money in the plan at your termination is yours to keep in either that 401k plan or rollover into various IRA options.

 

[Taxing Matters]

in either that 401k plan

You may have seen this coming. It's a § 401(k) plan, not 401K, 401k, 401-k, or any of the other ways I've seen it written on the internet. Internal Revenue Code section 401(k) defines these plans, and so they are properly known as section 401(k) plans. Jut doing my part to get the world to use the right term.

 

[FlyingRon]

OK, a 26 USC 401(k) plan. Happy?

 

[christinaland7]

Have you contacted your former employer's HR department?

Yes and they are not getting back to me.

 

[christinaland7]

Did you look carefully at the paystub? There are three sorts of safe harbor plans and the 3% amount you mention sounds very much like the "non-elective version of the plan. This means that the 3% is paid BY THE EMPLOYER. It likely shows up as an additional amount over your pay that is immediately excluded from taxability. You don't get the option to not consent to this.

The good news is that unlike employer matches in other plans, these vest immediately. So the money in the plan at your termination is yours to keep in either that 401k plan or rollover into various IRA options.

Yes, the paystub shows: DEDUCTION - SH Match and then the amount being deducted. But if I never set up a plan, so where is the money going?

 

[cbg]

There is such a thing as an auto-enrollment. You have x amount of time to say that you DON'T want to participate in the plan and if you haven't done so by the indicated date you are automatically enrolled. It's 60 days from date of hire/initial date of eligibility where I work.

If the money was deducted from your paycheck, then it is automatically vested and you will get it eventually.

 

[christinaland7]

Thank you!

 

[Taxing Matters]

OK, a 26 USC 401(k) plan. Happy?

That's good, but I'm fine with just saying § 401(k) plan. It's more about getting the the 401(k) part right rather than 401K or the other various incorrect ways I've seen people use.

 

[eerelations]

That's good, but I'm fine with just saying § 401(k) plan. It's more about getting the the 401(k) part right rather than 401K or the other various incorrect ways I've seen people use.

As in "It's HIPAA not HIPPA."

 

[quincy]

As in "It's HIPAA not HIPPA."

Both "HIPPA" and "401k" can be (gently) corrected when used (and I almost always make note of the difference between libel and slander) but I do not see these corrections as being any different than grammar or spelling corrections.

If what a poster is writing is understood, that is (to me) more important than how what is written is written.

 

[FlyingRon]

It bothers me more when people use affect and effect incorrectly.

 

[quincy]

It bothers me more when people use affect and effect incorrectly.

One of the lessons I learned as a journalist (and sometimes follow ) is that there are several different ways to say the same thing. If you are puzzled by which word to use, avoid the decision entirely by rephrasing your sentence.