401K Question

[SkipNewarkDE]

Ok, any accountants out there or anyone in the know? I am awaiting a call-back from my account manager on this, but was hoping someone could enlighten me prior to her calling.

I have a simple 401K through Smith Barney. My company takes money out of my paycheck each week, sends it to them, and then they distribute it to three different funds. Part of the deal is that the company is required to do some sort of matching contribution.

Don't get me started on this, but let's just say that around Christmas time last year, my company owners came in and told us money was tight, and that we would get our bonuses and matching contributions for 2004 in 2005, when the new product was released.

(Understand that funds were NOT so tight for the owners, as they purchased several new vehicles, and bought a horse farm in Florida. Infuriating, in light of a very meager Christmas).

Anyway, we are seven months into the year, and we still have not received our bonuses or 401K contributions for last year. I was under the impression that these contributions would have to be made by April 15 of this year... I could be wrong. IS there a deadline in the 401K law for matching contributions for the previous calendar year?

I am trying to find out if the good rule-of-law Escalade-driving Republicans that own this company are in violation of the terms of my contract, or indeed the terms of the Simple IRA.

[Lilyhoney]

1. I hope it all works out for you.

I can't help you with your question. But it is interesting.

[iamjoy]

2. Not Accountant/Work With 401(k) Plans

Is this a qualified plan? I mean, is it qualified under Section 401(a) of the Internal Revenue Code?

I work with 401(k) Plans, and I believe that although most companies give a match, they are not under any obligation to do so. At the very least they can determine how the matching contribution is determined and when it is given.

But I know some companies base their 401(k) contributions on company profitability. Others post their contributions at the end of the fiscal or plan year which may or may not correspond with the calendar year.

The thing is, they have to establish some criteria for the plan when they are setting it up and getting the IRS to make its favorable determination (to give the OK). Once those provisions are established, they can get into big trouble for not following them.

I would try to get a hold of a "Summary Plan Description" or benefits manual and see what it says. I think you can also request to view a copy of the full plan document (in your company's home office), although if you want a copy, you may have to pay for it. But a summary or employee handbook about it should be available, and available for free.

You may be S.O.L. but checking the documents may help.

added on edit
it is not just the IRS governing these plans, there are ERISA standards (Employment Retirement Income Security Act)

[SkipNewarkDE]

6. I seem to recall

That we would get matching contribution each year between 1 and 3%... This was in my benefits manual. It is a small company, so all of the resources you suggest I consult are all within reach.

[iamjoy]

7. And There Are Differences Between The Plans

qualified 401(k) plan, Simple 401(k), Simple IRA.

It is good that you have your documents. If your employer is not following it, send the Retirement Committee a letter (I would suggest certified mail) and include references to your employee manual.

If you do not get a response within 60 days, you can file a complaint with the department of labor.

This all depends, of course, on how far you are willing to pursue this.

[pitohui]

3. i think you're too late for 2004

maybe you can find out from irs

they have a website, irs.gov

but i don't think you are going to get the 2004 contributions, nor do i think the company is required to make any matching contributions

[SharonRB]

4. I think it depends on how your plan is set up

[SkipNewarkDE]

5. Tax Deadline

Got the answer. The deadline depends on when the company's taxes are due. So, if they have extensions, this deadline could be as late as October 15, 2005.