Complete Labor Law Poster for $24.95
from, includes
State, Federal, & OSHA posting requirements


No announcement yet.

ERISA and 401K

This topic is closed.
  • Filter
  • Time
  • Show
Clear All
new posts

  • ERISA and 401K

    Hello, everyone,

    We're doing our standard year end clean up things, which for us includes the posting of the employer match to the 401K account. I don't think we're posting the match in a timely fashion but I'm hoping that someone can clarify if this is an acceptable practice. Honestly, I don't think it is but can't find the documentation to say otherwise.

    I've been trying to slog through the ERISA information out there but I was hoping someone here might be able to point me in a better direction as I haven't been able to answer my question in my own research.

    We pull the funds from the employee checks for their portion of 401K and that is posted to the account on the payday the money is taken. No problem there. On the match end, things get wonky:

    We pull the match at calendar year end close. Any employee who has terminated does not get their match for that calendar year deposited to their 401k for that entire year, they only have their own contributions from Jan 1 to their termination date.

    Also, apparently when an employee terminates, they are only entitled to a percentage of that match. So, if employee X leaves after two years, they get 20 % of their match, after 3, 30%.

    Can anyone point me to a statute that might cover employer match contributions? Thank you!

  • #2
    What you've described is more of a function of your plan document rather than any ERISA regulations.

    There are plans that only contribute employer match funds once per year. And that a participant only receives it if they are employed on the last day of the year. Nothing illegal there.

    Your second question concerning terminations and the amount of the contribution they receive sounds like you are talking about the company's vesting schedule.

    Basically, employees are always 100% vested in their own contributions - so any money the employee puts into the plan is theirs when they leave. For employer money, there is usually a vesting schedule. Check your plan document to find your vesting schedule and then verify that your employees are vested accordingly.


    • #3
      Thank you, that was exactly what I was looking to find out.


      The forum is intended for informational use only and should not be relied upon and is not a substitute for legal advice. The information contained on are opinions and suggestions of members and is not a representation of the opinions of does not warrant or vouch for the accuracy, completeness or usefulness of any postings or the qualifications of any person responding. Please consult a legal expert or seek the services of an attorney in your area for more accuracy on your specific situation.