Employer never contributed

[Mikefern]

My wife has been enrolled in her employers 401k for 5 years. She just realized they they have never deducted from her check nor made a contribution in that time. The 401k is active but her employer states it is not. We’ve come to learn her employer never gave her name to the payroll department of the 401k company. Is she still entitled to the match even though they never took money out of her paycheck. She’s enrolled in 4% deduction to get a 3.5% match. We are willing to deposit money to get the match

[Lou S.]

How do you not notice for 5 years that no 401(k) deductions are coming out of your pay check? And how do you not ask for a statement for the 401(k) account you thought you signed up for?

There are IRS fixes for failure to implement a deferral election but you  probably have to show that you did turn in a valid enrollment form that your employer failed to implement. That said the fact that you are just now bringing this up 5 years later will likely not work in your favor.

 

[Mikefern]

The account has been confirmed active. We have all paperwork. She never checked just like her accounting department never checks their monthly list of participants coming from the 401k company. Thank you

[david rigby]

12 hours ago, Mikefern said:

The 401k is active but her employer states it is not.

Clarification needed.  Is the ER stating the plan is frozen (or frozen to new participation)?  If so, the effective date of freeze will be relevant.  Does this quote mean something else?  The participant needs to get a copy of the Summary Plan Description (SPD).

[Mikefern]

She has all the paperwork showing that her 401k has been active and setup since 2015. The problem is that her company’s accounting department put her name on the payroll list that goes to the 401k company. No money has ever been withdrawn from her check nor has there been a match. How can this be fixed?

[Bill Presson]

2 hours ago, Mikefern said:

She has all the paperwork showing that her 401k has been active and setup since 2015. The problem is that her company’s accounting department put her name on the payroll list that goes to the 401k company. No money has ever been withdrawn from her check nor has there been a match. How can this be fixed?

You can go to your employer or to an attorney or to the DOL at this point and ask for help.

But I don't have a lot of sympathy for someone that goes 5 years and doesn't look at a paycheck or question a w-2 or ask to see a statement or doesn't go online. It's incomprehensible to me to go that long.

[Mikefern]

I get it. I’m not looking for backlash from anyone. It’s bad enough. Just looking for some useful insight. Thank you

[movedon]

You're going to get opinions here from the perspective of people who are generally on the employer's side when these kinds of mistakes happen. The idea that the little guy (the employee) should at the very least share the blame, if not shoulder all of it, for what is primarily the employer's (or the employer's service provider, i.e., the people you're talking to here) mistake is deeply ingrained. This notion is even supported somewhat by the IRS's fix for this sort of thing.

OTOH, this is a common mistake and assuming your wife made a proper deferral election the fix is that she probably has some money coming to her. She should start by talking to whoever at her job is in charge of the plan. Ultimately, you'll have to decide whether the fix they offer feels satisfying or whether you want to spend some money on independent professional help that answers to you (like a lawyer) to find out for sure if it's fair. A do-it-yourself sort of a guy might be able to get the general idea of what the fix should look like by googling something like "employer didn't withhold 401(k)" and then focusing on authoritative results like the IRS.

[Mikefern]

Thank you!

[Larry Starr]

23 hours ago, Mikefern said:

My wife has been enrolled in her employers 401k for 5 years. She just realized they they have never deducted from her check nor made a contribution in that time. The 401k is active but her employer states it is not. We’ve come to learn her employer never gave her name to the payroll department of the 401k company. Is she still entitled to the match even though they never took money out of her paycheck. She’s enrolled in 4% deduction to get a 3.5% match. We are willing to deposit money to get the match

In all these messages, you have not provided the most important information.  In order to participate, you wife had to make an election to have a certain amount withheld from her pay and contributed to the plan. Nowhere do you say she did that.  We don't know what you mean by "she's enrolled". Very specifically: did she make a valid election of deferral?

Did she?  How did she do it?  Do you have a copy of the deferral election?  You obviously knew about the 401(k), but unless she made an election to have withholding, it doesn't happen.

[Mike Preston]

4 minutes ago, Larry Starr said:

In all these messages, you have not provided the most important information.  In order to participate, you wife had to make an election to have a certain amount withheld from her pay and contributed to the plan. Nowhere do you say she did that.  We don't know what you mean by "she's enrolled". Very specifically: did she make a valid election of deferral?

Did she?  How did she do it?  Do you have a copy of the deferral election?  You obviously knew about the 401(k), but unless she made an election to have withholding, it doesn't happen.

Larry, check out this sentence from the OP's last post:

"She’s enrolled in 4% deduction to get a 3.5% match."

[Mikefern]

Yes, 4% deduction from check and 3.5% match. The 401k company gave us copies of all documents and wrote a letter on company letterhead attesting to everything done right on her part. My wife’s company never incorporated her name on a payroll list that is sent to the 401k company every month. 401k company said it’s my wife’s employers accounting departments fault. Can this be fixed?

[Ebplans]

If the employer stonewalls your wife,  call your Regional Office of the Department of Labor's Employee Benefits Security Administration  They will get the employer's attention.  They handle these  issues frequently.

[Larry Starr]

17 minutes ago, Mike Preston said:

Larry, check out this sentence from the OP's last post:

"She’s enrolled in 4% deduction to get a 3.5% match."

Mike, I definitely saw that.

My concern is this participant spouse saying "she's enrolled" and not understanding that an actual deferral election was required and hasn't told us that she did fill out such an election and has copies to prove it.  IF that is the case, then she has a case.  If that is NOT the case, she is not "enrolled" in anything.  I don't trust the language "she's enrolled".

[Larry Starr]

18 minutes ago, Mikefern said:

Yes, 4% deduction from check and 3.5% match. The 401k company gave us copies of all documents and wrote a letter on company letterhead attesting to everything done right on her part. My wife’s company never incorporated her name on a payroll list that is sent to the 401k company every month. 401k company said it’s my wife’s employers accounting departments fault. Can this be fixed?

Does the record keeper actually have copies of a deferral election made by the participant? That is what I am trying to get a simple answer to. You didn't provide us details of what "all the documents" means, and without the deferral election itself, it doesn't mean anything.  You might be absolutely right; but until we have at least your verbal agreement that there was an actual deferral election signed and you have a copy, I'm afraid you have no case. 

[Mikefern]

Vanguard funds does. I don’t care what the employer says at this point. They’re just trying to cover their asses

[Mikefern]

5 minutes ago, Larry Starr said:

Does the record keeper actually have copies of a deferral election made by the participant? That is what I am trying to get a simple answer to. You didn't provide us details of what "all the documents" means, and without the deferral election itself, it doesn't mean anything.  You might be absolutely right; but until we have at least your verbal agreement that there was an actual deferral election signed and you have a copy, I'm afraid you have no case. 

She has it. So now what? 

[Mikefern]

In addition. She also has emails with the former HR director. It clearly shows she was enrolled

[Larry Starr]

3 hours ago, Mikefern said:

Vanguard funds does. I don’t care what the employer says at this point. They’re just trying to cover their asses

Once again, not an answer; do YOU have a copy of a signed election form from when your wife thinks she signed up for salary deferrals.  That is a yes or no answer. If there is an election and Vanguard has it, you need to have it.  You NEED to care what the employer says (right or wrong) if they are contesting your claim.

[Larry Starr]

3 hours ago, Mikefern said:

In addition. She also has emails with the former HR director. It clearly shows she was enrolled

What part of "do you have a copy of the deferral election signed by your wife back when she thinks she should have started having money taken out of her payroll check" is unclear?

[Larry Starr]

3 hours ago, Mikefern said:

She has it. So now what? 

Hosanna!  Are you saying you have a copy of the deferral election signed by your wife back when she was under the impression she was signing up to have deferrals taken out of her paycheck?  A simple question actually.  If you can confirm you have that actual document, I'd be happy to share with you what *I* think is the next step.  I take on cases like this as a consulting job, but not until I know the facts, which is all I am asking  of you. And this will be the last time I ask.

[Mikefern]

4 hours ago, Mikefern said:

She has it. So no? 

 

[Mikefern]

By the way you know read info given to you and the way you treat people, I’d say you no thank you

[spiritrider]

You might want to tone down your rhetoric. This is a professional forum by professionals primarily for professionals. They are gracious enough to occasionally try and help the members of the public deal with issues. You are new member who has registered and only posted in this one thread.

Usually when someone visits someone else's house they conduct themselves with manners and respect. Maybe the employer is at fault, but it has been like pulling teeth to get straight answers. Yet you have failed to demonstrate that you understand just how much responsibility you and your wife share in for this disaster.

It is mind boggling how your wife can not know for five years that her deferrals have no been deducted from her paycheck. It is mind boggling that you can not know what your joint investment portfolios are doing over five years. You never checked to see that contributions were deposited and what the earnings were over time.

Your conduct in this thread is not likely to inspire professionals to take time out of their busy days to receive abuse in return for their attempts to help.

[Mikefern]

Looks and read every post. The question was answered. M. Starr got fired up and went off. Read each post from the top. I clearly stated she had the form 4 hours before he sent 3 messages indirectly insulting me. Now you’re jumping in. How about giving some guidance or are you an ambulance chaser too