Late payment to 457b account

[Guest wayneter]

I am an employee of a local county government. I am in the 457b deferred comp program. The correct amount is being with held from my pay each pay period. However, the money is not being sent to my custodian (Nationwide) in a timely manner. The posting to my account is up to three months late.

What rules can protect me from this very late payment into my account? I have read the contract and there is nothing in the contract to state how long the county has to send the money to Nationwide.

Thanks for any help.

Wayne

[TLGeer]

Regs.

[TLGeer]

Regs. 1.457-9(a)(2)(ii) says: "Amounts deferred under an eligible governmental plan must be transferred to a trust within a period that is not longer than is reasonable for the proper administration of the participant accounts (if any). For purposes of this requirement, the plan may provide for amounts deferred for a participant under the plan to be transferred to the trust within a specified period after the date the amounts would otherwise have been paid to the participant. For example, the plan could provide for amounts deferred under the plan at the election of the participant to be contributed to the trust within 15 business days following the month in which these amounts would otherwise have been paid to the participant." Trust of course includes annuity.

Three months seems longer than reasonable. However, there are at least two problems here. First, the money has to be sent to Nationwide in that time period, not shown on Nationwide's records. Second, governmental plans don't have to comply with 457 until (1) the IRS tells them they are out of compliance, (2) 180 days have passed, and (3) the next year has started, so your can effectively ignore your comments without endangering 457 status.

The plan document itself gives you legal rights, including the right to have its rules on when funds should be transferred and credited to your account applied. And the plan document probably, repeat probably, parrots the requirements in the regulations. However, you are going to have to get a copy of the plan document and read it.

Good luck.

Tom Geer