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Hey all,

I'm not sure if this is the right board for this question, but hear me out. My employer switched to Prudential as its 401(k) provider a number of months ago. In the months since then, a few of us have noticed some strange games going on with regard to the timing of deposits. We're paid monthly, and you might be tempted to think that our retirement money would therefore be deposited monthly. Oddly, that's not the case.

Sometimes, no money is deposited in a given month. Other times, we see a double deposit. Still other times, the right amount of money goes in, but it's delayed (for example, the money from my September 1 paycheck wasn't actually invested until October 9th).

I have several questions:

1) Is this in any way normal?
2) Is this in any way legal?
3) Does anybody else have a similar story?
4) Is this more likely the fault of Prudential or my employer?

Thanks for your help.

--
FreeFlyingFool

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I don't think there's anything illegal about it, some trustees are notoriously slow in handling your money. It increases their float, which means more income from interest in their account while the money is being held.

You need to contact your employers benefits people and get some writtten answers to your very pointed questions.

Ther are some custodians who make the purchases almost immediately, that is, within a day or two.
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Greetings, FreeFlyingFool, and welcome. You asked:

<<I'm not sure if this is the right board for this question, but hear me out. My employer switched to Prudential as its 401(k) provider a number of months ago. In the months since then, a few of us have noticed some strange games going on with regard to the timing of deposits. We're paid monthly, and you might be tempted to think that our retirement money would therefore be deposited monthly. Oddly, that's not the case.

Sometimes, no money is deposited in a given month. Other times, we see a double deposit. Still other times, the right amount of money goes in, but it's delayed (for example, the money from my September 1 paycheck wasn't actually invested until October 9th).

I have several questions:

1) Is this in any way normal?
2) Is this in any way legal?
3) Does anybody else have a similar story?
4) Is this more likely the fault of Prudential or my employer?>>


Your employer has until the 15th business day of the month following the month of the deduction to deposit your contribution into your 401k account. In the example you cited, that time limit was met. However, if that's not the case with other deposits, then you have legitimate grounds for a complaint and should pursue the matter with your employer. The rules are quite clear and quite strict. If your employer cannot provide a satisfactory explanation and/or if the problem persists, then you should complain to the Department of Labor, the government agency response for enforcing this requirement on employers.

Regards….Pixy
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FWIW, my 403(b) contributions (TIAA-CREF) appear to be credited to my account on the same day my EFT paycheck is deposited.
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TMFPixy wrote:

Your employer has until the 15th business day of the month following the
month of the deduction to deposit your contribution into your 401k account.
In the example you cited, that time limit was met. However, if that's not the
case with other deposits, then you have legitimate grounds for a complaint
and should pursue the matter with your employer. The rules are quite clear
and quite strict. If your employer cannot provide a satisfactory explanation
and/or if the problem persists, then you should complain to the Department
of Labor, the government agency response for enforcing this requirement on
employers.


Thanks for the info. From everything I've seen, it would appear that my employer falls within the legal limit, even if I'm not happy with their slow response. Perhaps a letter to corporate HR asking for more information about the delays is in order.

--
FreeFlyingFool
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I had a similar experience with my last employer who would hold the funds out as long as possible before investing them in the 401k. Since my employer was in financial straits, they were basically playing the float with everyone's 401k so that they could use the interest to help maintain the business. Sadly, that trick can only be used so long before a company needs to generate real revenue to stay in business. They have just had yet another round of layoffs, and I'd be surprised if they are still around in 6 months.

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