401k contribution payments

[frustratedemp]

I currently participate in my MD companies 401k plan. However, my company regularly withholds the payroll deducted 401k contribution between 5-14 days beyond when payroll is made. This regular practice on the part of my company has caused me to loose and entire quarter's worth of interest on my retirement dollars. It is apparent that this practice is done to take short term loans utilizing the employee's retirement dollars as a brief bridge loan until other recievables have been deposited.

When asking the CFO of the company about this practice, I have consistently been ignored. At one point I was told that it is ADP's fault, however, I later found out that my company does not handle 401k distribution through ADP...the company is responsible for releasing these funds to the 401k plan account. I have tried to internally "blow the whistle" on this practice with several other employees, in hopes of shining the light on this unethical practice, but it still continues.

Is there any legal action that can be taken to prevent this dispicable business practice from continuing?

[Pattymd]

The federal law regulating 401(k) plans requires that contributions be forwarded "within a reasonable time", which has generally been interpreted to be no less frequently than monthly, by the 15th of the following month. I don't see any violation of the law in the situation you describe.

[cbg]

There is a great deal more to the process than simply sending the funds to the 401k administrator. 5-14 days is actually quite reasonable when considering the logistics involved. As one who is involved in the actual process, I can attest to this.

I see nothing whatsoever in your post to support your contention that funds are deliberately withheld as "bridge loans". I doubt you will find many companies that have the funds to the 401k adminstrator in less than 5 days.