Match On Total before or after flex deductions

[Guest veditasse]

Hello everyone,

I have a quick question for all of you 'knowledgeable' benefit professionals:

I elected to have 6 % withheld for my 401 k at work so that the company will match up to 50%.

I also have some money put aside for both Flex plans, like to pay for my son after school arrangement as well as for health expenses for the year. What I have noticed on my latest paycheck is that the 401 withdrawal gets applied to the gross amount of my paycheck only after the other monies I am putting aside have been deducted, so as a result I am not putting away 6% of my gross but a smaller amount.

Are my company people doing this right or should they start from my gross, put aside the 6% there and move on with the other deductions ?

Do I have a case to bring up with my company or is it just procedural? It seems to me that the company is able to cut some of my money away by not giving me their part on the real full 6% I have subscibed to have withdrawn.

Please let me know.

Thanks.

G.

[K2retire]

It depends on the terms of your particular plan. That should be explained in the Summary Plan Description that you received when you became eligible for the plan. If you can't find it, ask your plan administrator for another copy.

[Guest veditasse]

It depends on the terms of your particular plan. That should be explained in the Summary Plan Description that you received when you became eligible for the plan. If you can't find it, ask your plan administrator for another copy.

Thanks for the suggestion, K2retire.

Here is what appears in the Plan Description:

... . Eligible compensation for computing contributions under the Plan is the taxable compensation for a Plan Year reportable by your Employer on your IRS Form W-2, excluding reimbursements or other expense allowances, fringe benefits, moving expenses, deferred compensation and welfare benefits and including salary reduction contributions you made to an Employer sponsored cafeteria, qualified transportation fringe, simplified employee pension, 401(k), 457(b) or 403 (b) plan. In addition, compensation excludes:

Overtime pay

Bonuses

Commissions

Severance pay.

......

Upon reading the above description what would you think the answer to my question is?

Thanks!

G.

[QDROphile]

"including salary reduction contributions you made to an Employer sponsored cafeteria *** plan"

[GMK]

From the section of your Plan Description that QDROphile has highlighted, it appears that you have a case to discuss with the company.

If you think of it, let us know what the company says. Thanks.

[dmwe]

I agree that I don't think your payroll system is handling your deferral properly. It should be a percentage of your gross.

[Guest veditasse]

From the section of your Plan Description that QDROphile has highlighted, it appears that you have a case to discuss with the company.

If you think of it, let us know what the company says. Thanks.

Thanks,

that is exactly what I understood from the description. Do you know what could be done about this by the company, is there any legal ground on which I have to move ? I just want to take the right steps.

Again, thanks for the time and the advice.

G.

[GMK]

Write a letter to the Plan Administrator requesting the benefit to which you feel you are entitled. (Write the letter. Don't just go in and talk to someone.) Quote the "highlighted" part of the Summary Plan Description and compare that to the actual deferrals. In the letter, ask the Plan to go back and make it right.

Toward the back of your Summary Plan Description should be a section on Participants' Rights. It tells you what the Plan Administrator is required to do if the Plan rejects your request. And then you can appeal their rejection of your request. Generally, those steps must be completed before you file suit in a court. But few are keen to go to such drastic lengths. If things do not go well for you, the Division of Technical Assistance and Inquiries of the US Dept. of Labor in Washington, DC, may be able to give you some advice.

This is probably just a clerical error (keep a positive attitude). The Plan should thank you for pointing it out and fix it to your satisfaction. (They are not required to do the 'thank you' part.)