Safe Harbor and laid-off employee

[Guest etalia]

I am in a situation where I was laid off today and my company hasn't deposited the safe harbor contributions for 2012 let alone 2013. I assume that I am entitled to the 2012 contribution and a prorated 2013 amount but I am hoping somebody can confirm that. As of now I haven't head if the company will honor either or both of them but if they are true to their past they will not honor them.

Any help would be appreciated!

[401king]

The 2012 Safe Harbor deposit deadline is 12/31/2013; the 2013 deadline will be 12/31/2014 (assuming the Plan is on a calendar year). You should receive Safe Harbor contributions for both years (assuming that if it is a Match you made salary deferrals).

[Guest etalia]

Thanks, that was my understanding too. What happens if I rollover my 401(k) prior to the safe harbor contributions? I was hoping to rollover my 401(k) immediately but I don't want to lose my claim to the contributions.

[PensionPro]

Sorry to hear about your employment situation. The best sources of information are the Plan Administrator/HR contact as well as documentation you have received such as the Summary Plan Description, safe harbor notice, etc. You should not lose claim to your safe harbor contributions merely by rolling over your account balance.

[Guest etalia]

Thanks, I thought so as well but was looking for other opinions before I ask the employer about it. I know contributions have never been paid after an employee was laid off but I also know that nobody challenged that. This is a very small consulting firm (less than 50 people) that lives cash-in/cash-out so contributions are always made at the last minute.

[PensionPro]

I would recommend that you review the safe harbor notice closely as there are several types of safe harbor contributions. If 2012 contributions are not made by 12/31/13 (assuming a calendar year plan) you can check with the employer after that date. If you do not receive a satisfactory response at the time you can escalate your grouse to the DOL's EBSA. It is a good idea to follow up on the contributions you are entitled to because your employer may or may not apply the law correctly or may make a miscalculation or misdeposit.

[Tom Poje]

As was indicated above, you won't lose your claim to your safe harbor merely by rolling your balance out of the plan.

one possible issue to consider (and I don't see think I have ever seen this brought up before), there is, most likely a distribution fee (we all live with that, it is not large, but it is still a fee).

if you roll out the balance, then at a later date receive the safe harbor and then roll that amount out I imagine you will get hit with the distribution fee again.

good luck.

[masteff]

It is possible in a non-safe harbor plan to have a last day rule. Safe harbor plans are not allowed by Federal law and regulation to have that rule, although someone there may not understand that.

Be sure to ask for a copy of the SPD (Summary Plan Description), this should contain their ERISA claims procedure. If they don't deposit the funds by the dates mentioned above, you should follow this claim procedure (including how to appeal your claim) to ensure your claim has the best legal footing and doesn't get thrown out for not following it.