Employer floating 401K deduction ?

Yes, it is. I believe they have until the 15th of the month after the month deferrals were made in to make the deposit. In other words, your January deductions have to be deposited by 15 February.

Usually it happens in a week or two, though.

-- Rich Carreiro snipped-for-privacy@rlcarr.com

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Yes, perfectly legal. In fact, employers used to abuse this by grouping up deposits for an entire quarter. If a company got in trouble, they might never make the deposit, or use it to pay company bills. As a result, a law went into effect that regulates how long a company has to deposit 401K funds. I don't remember what that time period is, but something like 6 weeks comes to mind.

You are smart to keep track of this. No one will care as much about your money as you do.

-john-

Today's a legal holiday in the US so I wouldn't expect anything to happen today. Next business day, or even a few days, to make the transfer is nothing unusual, though.

Recently my employer has been having problems with 401K money getting stuck after we switched payroll services. When I asked our payroll person about it, she said that the law requires the deposits to be made within 2 weeks. It also seems like it's a multi-step process: she has to run the payroll and poke Fidelity, Fidelity has to poke her back, and she has to respond to authorize funding the accounts, before anything will happen. On top of that, I noticed that Fidelity's web site usually doesn't show the deposit until the business day after it arrives. So, yeah -- somebody's making money on the float, and it isn't me, but that's kind of the way it works.

-Sandra the cynic

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My company has a really quirky policy for its contribution to the

401K: lump sum April of the following year. And its deposited as advertised. A company is not required to make any contribution of its own at all.

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