401(k) contribution problem


I

IraS1

I realize that this is probably more of a legal question
than a tax question, but here goes.

An acquaintance told me that her employer never deposited
her 2003 401(k) contributions into her account. Her W-2
showed the deductions correctly, but the statements from the
401(k) administrator don't reflect them.

So far she has been getting the runaround from the employer.

What should she do? (and/or where should I ask this
question?)

Ira Smilovitz
 
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A

Arthur L. Rubin

IraS1 said:
I realize that this is probably more of a legal question
than a tax question, but here goes.

An acquaintance told me that her employer never deposited
her 2003 401(k) contributions into her account. Her W-2
showed the deductions correctly, but the statements from the
401(k) administrator don't reflect them.

So far she has been getting the runaround from the employer.

What should she do? (and/or where should I ask this
question?)
For taxes? File a claim with your employer and/or SSA
for a refund of incorrectly withheld Social Security
taxes.

And misc.legal.moderated seems a better place to ask. State
law is important, so you'd need to specify the state your
acquaintance worked in.

Possibly, the state department of Labor might be interested.
 
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E

Ed Zollars, CPA

IraS1 said:
So far she has been getting the runaround from the employer.

What should she do? (and/or where should I ask this
question?)
Well there are probably a few things to do.

First, it's always important to remember if the issue
involves an employer that taking action likely means you
should have a new job ready to go <grin>--but if an employer
truly is not paying over 401(k) contributions, then I
suspect the entity is iffy enough financially that whether
or not she does anything else floating a resume wouldn't be
a bad idea.

Second, if the amount is significant, she should consult
with an attorney skilled in ERISA issues who represents
employees. This is a "slam dunk" case in terms of getting
the employer ordered to pay the funds over to the plan. The
attorney will definitely "get attention" from most any
employer and most likely will get action.

Third, there's always the option of contacting the local
office of the Department of Labor's plan compliance group,
who has jurisdiction over such matters and usually has a
special interest in employers who seem to be abusing the
qualified plan. There are substantial penalties for doing
this sort of thing and the employer will be in hot water
here.

I suppose the danger, though, is that if the entity is
financially "iffy" and can't pay over the amount due to
everyone then there's a chance that by bringing in the DOL
she may a) end up driving the employer out of business and
b) not end up with the full amount deposited in her account.
If she hires her own attorney to pursue it first, as unfair
as it may seem, it's possible she will get her balance paid
over.
 

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