I just got an email from our controller, HR director, and CEO telling me they haven’t been matching my 401k contributions (up to 5%) for the past two years. I’m not sure how my accountant and I missed this, but here we are.
They say they’ll deposit the missing funds, but my retirement account has done really well over these two years. What about the lost earnings? I think they’re supposed to adjust for that too, but I’m not sure.
They are required to cover lost earnings too. Get a copy of the plan documents like u/alanmitch34 suggested—having those will help if this gets complicated. Once you have the documents, email them about calculating the lost earnings on the match, and include this link from the IRS for backup. If they push back, it’s lawyer time. They’re the ones who messed up, and they should be going out of their way to make it right. If it comes down to it, a complaint to the Department of Labor could be the next step.
Zenith said: @MaryJackson
And if this happened to you, it might have happened to others in the company.
I’d say OP should get their share first, then let others know.
Yeah, it might sound selfish, but two years of missed matches for many people could be a big deal for the company. Get yourself sorted first, then make sure others know to check. I’d even consider moving it into an IRA once it’s all set.
Farley said: @Reeve
No risk of it being taken back due to company issues, as 401ks are managed by financial institutions, not directly by the employer.
True, I was more thinking of a scenario where they struggle to pay everyone, leading to proportional clawbacks. Moving it to an IRA could add security, but that’s just me thinking out loud.
@Ivy
That amount assumes all funds were due two years ago in one go, not gradually over time. It should be calculated based on the specific investment choices and timing of each missed contribution.
Cort said: @Ivy
That amount assumes all funds were due two years ago in one go, not gradually over time. It should be calculated based on the specific investment choices and timing of each missed contribution.
Good point. OP mentioned they had about a 20% rate of return.
Just a note—there’s no way your tax accountant would know about this. They don’t usually review 401k statements. It’s on you to check those statements regularly.
Luna said:
Just a note—there’s no way your tax accountant would know about this. They don’t usually review 401k statements. It’s on you to check those statements regularly.
True, but your employer definitely dropped the ball here. If they don’t cover the lost earnings, you may need legal advice to ensure your rights are protected.
First, find out if this issue affected only you or the whole company. Then, ask if they plan to address this fully. If they refuse to make up for lost income, it may be time to lawyer up.
Rebel said:
First, find out if this issue affected only you or the whole company. Then, ask if they plan to address this fully. If they refuse to make up for lost income, it may be time to lawyer up.
It’s just me, and it’s been the entire time I’ve been here. I thought a profit share on my paycheck was the match, but it turns out that’s separate.
This is the guide I follow in 401k consulting. It might take time to calculate the correction, but you should be made whole. If they refuse to make it right, consider a complaint to the Department of Labor as a last resort.
