Mandatory 401k contributions

[esmeldi]

I understand that an employer can institute a mandatory 401k program. However, shouldn't I have a say as to how much of my money is put into this account. For example, I work for a postal contracter as a truck driver. In case you're wondering I am a full time employee who files a w-4, not a 1099 situation here. Anyway, I get a base hourly salary of x dollars plus a few dollars an hour extra for called health & wellfare pay. My employer has decided that all of this h&w money will be put into the company 401k. To add insult to injury we have to wait 90 days after a pay period for this money to be deposited into the 401k account. Meanwhile, the employer does not contribute one red cent and won't even allow us to change the amount that is taken out of our checks. This causes problems for me because in the past I used this money to pay for my family's health insurance. Now we have no insurance and no control over 20% of my check. Please help me to understand if this is legal because I already know it's not moral!

 

[cbg]

If I am reading you right, for the most part, this can be legal IF your plan is set up to allow it.

A few years ago, the government allowed a new kind of 401k plan. On these plans, you were automatically enrolled in the 401k plan, with a certain percent deducted, IF you did not make a pro-active choice otherwise. As an example, you would be enrolled in the plan with a 5% deduction 90 days after enrollment unless, during that 90 days, you either filed a written waiver with your employer/administrator or actively enrolled with a different percentage. If your company's 401k is set up like this, then it is legal. If it is not set up like this, it is not legal. You are entitled by law to a copy of the plan SPD, which would tell you whether or not your plan is this kind of plan.

I'm a little confused by your comments about health insurance, btw. Many companies offer x amount of money to be used towards benefits. If there is extra money after the benefits are paid for, it is not at all unusual (and quite legal) for that money to be contributed towards the 401k plan.

Or are you saying that they are making this contribution in lieu of health insurance? Unless you are in either MA or HI, your employer has no legal obligation to provide health insurance, and no legal obligation to provide you with any extra pay towards your own purchase of it.