Kissland Posted May 3, 2021 Posted May 3, 2021 My employer began offering after tax elections in January of this year. Starting with my paycheck dated Jan 22 I made large after tax contributions on every paycheck. None of these amounts have been credited in my 401k account (although they were deducted from my pay) and they currently total over 13k. In addition I was terminated from my job on Friday. What penalties would my employer be subject to? Also would the unpaid amounts count as unpaid wages?
C. B. Zeller Posted May 4, 2021 Posted May 4, 2021 Have you asked your employer about the missing amounts? What was their reply? Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance. Corey B. Zeller, MSEA, CPC, QPA, QKA Preferred Pension Planning Corp.corey@pppc.co
BG5150 Posted May 4, 2021 Posted May 4, 2021 "After tax" or Roth contributions? Did you check with your 401(k) custodian? Maybe you are looking in the wrong place. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
Lou S. Posted May 4, 2021 Posted May 4, 2021 If they were withheld but not deposited yet, they are late and subject to earnings back to the point they were due to be deposited. Luke Bailey 1
Kissland Posted May 13, 2021 Author Posted May 13, 2021 On 5/4/2021 at 10:12 AM, C. B. Zeller said: Have you asked your employer about the missing amounts? What was their reply? That they didn’t have the proper processes in place to appropriately credit the after tax amounts into my account and thus had been unable to make the deposits
Kissland Posted May 13, 2021 Author Posted May 13, 2021 They w On 5/4/2021 at 1:35 PM, BG5150 said: "After tax" or Roth contributions? Did you check with your 401(k) custodian? Maybe you are looking in the wrong place. they were after-tax, not Roth. My employer admitted they had not deposited the after tax amounts into my 401k
C. B. Zeller Posted May 14, 2021 Posted May 14, 2021 Once the money is withheld from your paycheck, it becomes an asset of the plan. Since your employer did not promptly deposit those contributions into the plan, they have likely engaged in a prohibited transaction under ERISA. As Lou S. mentioned, the correction for this error is for them to make up the amounts with earnings and deposit it to the plan. If your former employer is not responsive, you could get the Department of Labor involved, as they are the government agency with jurisdiction over participant rights in retirement plans. https://www.dol.gov/agencies/ebsa/about-ebsa/ask-a-question/ask-ebsa Lou S. 1 Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance. Corey B. Zeller, MSEA, CPC, QPA, QKA Preferred Pension Planning Corp.corey@pppc.co
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