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1) Is it legal to hold my funds in "limbo" as it were?

The employer must send your contributions to the broker "as soon as possible" but no later than the 15th business day of the month following the month in which the funds were withheld.

This applies to funds withheld from your paycheck. The employer has a wide latitude in choosing a schedule for any money they contribute, so long as it is in the plan document. (My current employer, for example, deposits all of the matching funds on the last business day of the year.)

2)Anyone run into the same problem/any suggestions on how I should proceed?

Are there other employees around who contribute to the same 401k? Are any of them having the same problem? (If it's just you that's having this problem, it probably is a bookkeeping error or some such).

I would start with the employer, but at first, be polite and treat it like a bookkeeping error, "I'm very concerned about my 401k contributions. Shouldn't they have been deposited already? I'd like to make sure they haven't gotten lost somwhere. Can you show me where in the plan document it says X?"

Ultimately, the Department of Labor has jurisdiction over this. Some colleagues of mine used to work for a company where the 401k funds were outright embezzled (not that is necessarily happening in your case).

Good Luck,
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