late 401(k) deposits

[eilano]

Payroll company is the recordkeeper. They pull the 401k deposits from employer’s account on date of payroll but do not deposit with the custodian until 6+ days later. Does the employer have full responsibility for late deposits?

[Erik Read]

Are they truely waiting that long to deposit the funds, or is it that the wire/etf/ach takes 5 days to clear at the plan custodian?

I'd ask the payroll provider when they're making the tax deposits, and the plan contributions should co-incide with those deposits, otherwise - time to find a new payroll provider.

[eilano]

Yes, the payroll company is waiting to wire the funds.

[FJR]

A lot of BIG payroll providers who are in the 401(k) business as a bundled provider will use the float on the payroll deductions. It is part of their business model and is one of the reasons why they can come off as a low cost provider. There is a lot of money they make by not transmitting on the same day.