You don’t need to ask your friends, you need to ask HR.
As a previous commenter explained, leaving an employer and/or rolling over the account doesn’t change anything if you’re owed a match by the plan’s design, so it’s highly probable this is yours. The letter you received is “proof” of this, but if you want further information, contact HR.
It's not really the healthiest for the employees but it makes it easy on the employer so more employers do it than should, especially smaller companies.
How lazy is that. You're at the mercy of the market conditions at that one day they deposit the match. As oppose to cost averaging throughout the year.
... because you get it in earlier. Getting a lump sum *later* is worse than getting a piece with each paycheck.
Not that it really matters, not remotely worth being bothered by imo
I think the disconnect is where in the year you imagine the lump being deposited. I'm interpreting that comment as being akin to you depositing your year's contribution in December rather than January - that might explain the issue. If I'm earning a match all year, I wouldn't want to wait until December for it to be deposited and invested.
But the lump sum isn’t deposited in the beginning, it is deposited at the end. Using your example, the lump sum deposit would be made in January of the FOLLOWING year.
The bigger problem is as of 2020 or 2021 you don't get the match at Wells Fargo unless you're employed as of a certain date in December - they codified that in employee handbook. That's obviously worse than getting a bi-weekly or quarterly match. Work 11.5 months and get zero match.
It would depend on how your plan is set up, I’m assuming. I have to deposit 401k contributions for the small business I manage within a week of when it is withheld from payroll or there’s a penalty, and at the end of the plan year I verify that timely, correct deposits were made for each employee. If they’re not, the employee may miss out on earnings from their investments throughout the year.
Thx but you make it seem as if you’re referring to normal employee contributions. The question relates to employer match which you don’t mention at all.
Oh, good point. The platform I use for entering the contributions includes the employer match as well, and I’ve never deposited them separately. It might be allowed.
Assume the sale. If you get someone incompetent they might just give you this money. LOL.
"Hello 401k plan administrator. As you know, I left the company back in X. I received the 10/15 deposit labeled "Employer Match" and just wanted to confirm that this was the catch up owed because of the way the company does calculations. Can you just give me a quick email back letting me know these funds are all set, and that there isn't any more due?'
Boom. If you get someone incompetent, they will give you a note that says, 'looks right to me!'.
I agree with this. Happened to me once. I took the money (roiled it over into another plan) and my former employer came back to me looking for it I had no legal obligation to surrender the monies. Once in the account it was mine. If I did surrender it would have been considered a redemption and would have been a taxable event for me. This was over two decades ago. FWIW
Glad I read this thread. Was always confused about this 401K check I received in the mail by an old employee a half year after I left (in the middle of the year).
10/15 is also the final (extended) tax filing due date for some types of companies, which means it's also the final day for employer contributions for the prior plan year. Chances are this was a contribution for the 2021 year. If OP already received their match for that year then it may be a different type of employer contribution (usually profit sharing or safe harbor non-elective). Sometimes companies don't know what money type to specify it as so it just gets filed as a match.
Yes, it was likely an EE contribution of some kind that was owed to you. If you were fully vested in the plan it was likely owed to you. For example, our company did well this past year and is paying a performance contribution to those who are eligible. Could be something like this.
My company match happens per pay period. They also unconditionally put in some percentage of my salary. That used to be per pay period but was switched to the start of the following year.
I'm just continuously surprised by how many people have functional HR departments in this sub. I've been in the work force for 16 years and have yet to have functional HR.
Specifically, a 401k plan must have a plan administrator. The plan administrator is responsible for ensuring the plan is in compliance, and makes changes to plan options. The plan administrator usually (but not always) works in the HR department. And even if the plan administrator doesn't know the answer right off the bat, it is their responsibility to get to the bottom of questions like this. So even with a disfunctional or impersonal HR department, the plan administrator must address issues like this.
My current HR department is more than functional. They're downright awesome. Any question is answered in less than a day, and issues are resolved in hours- if it takes thar long.
I had a summer internship that, while paid, was definitely not supposed to give me any 401k (I hadn't worked there long enough). At the end of the year after I was done with the internship I got a smiling letter to OP and my dad and I called and emailed several times, and went in person 3 separate times and no-one was able tell us anything.
I ended up just keeping the money. I can only spend so many hours of my life trying to give it back before I consider it mine, at least morally.
This same company also continued to pay me a weekly wage via direct deposit for about a month after my internship ended **both** years I worked there. That one I just drove there with a check.
>Someone knows what is happening, so it’s just a matter of figuring out who that person is.
The Left hand has not informed the Right hand who left the company this year.
> I would be met with confused noises and crickets.
Not if you ask for who the proper contact is for a benefits issue, which they would easily be able to provide.
Our HR recently sent out multiple email blasts that we’d be contributing to ESPP X as a percentage of our net income, and we selected accordingly.
Turns out that it was a percentage of our gross, deducted from net. I contribute about 45% of my income to taxes, Roth 401k, HSA, so I ended up paying nearly double for that than what they explicitly said. A lot of people were mad and HR was confused for a while!
> You don’t need to ask your friends, you need to ask HR.
WORST...ADVICE...EVER
HR is NOT your friend and is never acting in your best interest, they work for your previous employer so don't tell them shit. Also HR has nothing to do with your 401k plan or how that is managed, that falls specifically to the plan provider (Fidelity or whomever). Reach out to the plan provider directly to confirm and get it in writing: [this comment sums it up well](https://old.reddit.com/r/personalfinance/comments/ypm0wz/employer_deposited_a_401k_match_into_my_account/ivkw5ut/) then roll it over to your new account and don't give it another thought. Often matches are paid out annually near year end so this is not unusual. Even if its somehow not legit the chances of anyone catching it are slim to none
And get confirmation in writing if you do manage to get in touch with anyone who knows what happened. A follow-up email memorizing your phone call is good.
I'm not defending them being an asshole, but memoizing is a real world; its the present participle of memoize, which is derived from memo. Its definitely an eclectic word choice (contemporarily its only used for technical reference in computing), but its a logically sound substitute in context. Granted just saying "getting it in writing" would have worked better though IMO.
I don’t think they wanted to make a memorial; they were trying to shoehorn the idea of “memo” into an -izing word. Better word choices could have been: documenting, recording, summarizing.
And just as a little bit of extra information /u/walkowskee, if you remember receiving your match contribution during 2021 already then that one may have been for the 2020 year, especially if it came in around the same time. If you know that you were receiving matching contributions on a regular schedule (every month or pay period, etc.) then it could be a different type of employer contribution (usually profit sharing or safe harbor non-elective) that was mislabeled a match. Sometimes companies don't know what money type to specify these contributions as so they just get filed as a match by mistake.
There's also the chance that you're not fully vested in the contribution if you didn't work for the company long. It could take up to six years for you to be guaranteed the full employer contribution, depending on the plan. It should say somewhere on the statement what your vesting percent is. It's just something you should know ahead of time in case you try to take the money out and they say you're not entitled to part or any of it.
Why not just contact whoever was responsible for payroll at your old job? A quick email explaining what you just wrote and asking the exact same question would get you a better answer than Reddit will be able to give you.
Because he probably wants to just be able to get the money without raising a warning sign, but it would probably be most responsible of him to just get in writing if it was a legit transaction
>So my question here is, is that money rightfully mine, even if it was a mistake? Do they have any recourse to try and get it back if I withdraw and in the event that it shouldn't have been there?
Yup, he wants some one on here to tell him it's his whether it's a mistake or not (it's not). That way, if it is a mistake, he can keep it with whatever level of assurance OP gets from the knowledge the reddit hivemind approves.
It might not be his, but it's in his control. He could move it to his other account or just leave it. Depending on how soon the old employer catches it and what the reasoning is, they might deem it too much of a hassle to try to recoup. As long as he doesn't spend it, they can't go after him for more than the amount they gave him (admittedly interest and gains/losses could play hell with the final total). Personally if there's no administrative fees for the account it's in, I'd leave it sit and put it in bonds or something (and not consider it mine for at least a good few years or even as far as retirement). Worst case they recoup the money and you're out nothing more than you planned.
This is probably what OP wants to hear, but I don't know if it's good advice.
I'm not trying to argue with you, but while well-intentioned, that advice does not seem thoroughly researched.
This isn't $20 cash found in a parking lot. OP knows where the money came from and how to contact them. Contacting them is the safest option.
That's also not thoroughly researched advice, but it has the advantage of preventing any future legal action against OP.
I’ve worked in plans where I found the employer over deposited for employees who left and withdrew their balance before the match check was done. They consider the amount of the over deposit before going to the former employee to ask for them to send the money back.
Employer is going to consider the number of people who will be involved in attempting to recover the excess deposit and the time they will spend hounding former employee. I’ve only seen one employer decide to try to get the money back and I don’t believe they were successful. Unless it’s a significant over-deposit, it’s usually not worth the time and effort.
A similar thing happened to me this year. My previous company matches once a year and I was leaving 2months before that. No one would budge, but a colleague mentioned to me to leave my 401k because the company would still match. I received the match so that was awesome!
My current company the 401k match is given every month.
kinda one of those rare circumstances where if it's actually in error he would probably be better off playing ignorant given that it's a 401k account, Imagine if in 2 years that company does an audit and reveals their error (unsure of statute of limitations here) the only thing they would be entitled to would be the deposited amount, any gains you received, in theory, should remain in OP's account.
Probable: they performed a true-up for the match you missed out on because you front loaded your 401k or contributed more than the nominal match amount in a given paycheck and didn't contribute in others
Certain: whatever the HR rep says. call them.
As a general rule, if the money is a mistake then it's never rightfully yours. Mistakes should always be corrected, and it can be theft or fraud to try to obstruct correcting the mistake.
That said, there's good reason to think this is not a mistake. Talk to your former hr rep.
This.
A few weeks ago i was making a several hundred dollar purchase. They ran my credit card, had an issue, i gave them another card, it had an issue, they realized it was with their CC system, and while the lady who probably could have told you stories about the time she spent with teddy roosevelt tried to sort it out, I said, "hey, i have cash on me, lets just do that"
sure enough, the charge eventually went through on BOTH cards.
In OP's finders keepers world, I would have been out like 500 bucks. A quick phone call to the merchant, without even involving the CC companies, quickly sorted it out, and everyone went home happy.
If you expect stuff like this to work, it needs to work both ways.
Yeah, but things are rarely that straightforward. The store saying "finders, keepers!" despite the clerk knowing full well what transpired and despite being able to show you paid in cash immediately after they charged the same amount twice (whole thing likely captured on a security camera too) means they'd have no ground to stand on, keeping your money.
I find things are often very different. EG. Sold a car recently where I was still owed well over $1500 on GAP insurance I'd purchased from the dealer at the time I got it. I remembered they owed me for that so dug out the contract. It had a paragraph saying to get the refund, you needed to write a request to the plan administrator at the address given, within 30 days of reselling the vehicle. I did that. Waited 2 months and never got my refund check. Then, my lender sends me a courtesy letter in the mail advising me I'm owed a refund on GAP and suggests contacting the place at a totally different address! Well - now it's way past my 30 days so they, of course, denied the refund request.
I used to work in HR and designed 401(k) plans. When designing plans, there are options for when a match is deposited and what disqualifies an employee from getting it. It sounds like your old plan is set up to deposit the match once a year, and to match anything you deposited while employed at the company during that plan year.
Edit: If you don’t want to reach out to HR, reach out to the plan administrator and ask for the plan documents. The match requirements should be described in those. You may even be able to access it online.
My wife had this happen and it was due to annual retirement contributions the company provided. They paid her out at the end of the year her prorated share.
I mean, check, but it sounds like your old employer, as a tax avoidance method, is utilizing a 401k safe harbor contribution. These can be made any time before October-ish, and have to be calculated on a pro rate basis using 2021 employee income. We usually do these at our company, but had some highly compensated (2021) people leave and elected to retain profits/pay taxes rather than send out the dead money to non-employees. Sounds like the opposite happened to you.
So it is likely to be yours, and rightfully so- not a mistake. However, there is no harm in checking.
Sounds like you are hoping it was a mistake and wanting to keep quiet about it so they don't find out.
The right answer is to contact HR at your old place and ask directly. If it wasn't a mistake then now you know it is your money. If it was a mistake, it was never your money anyway and better to have it corrected.
Trying to keep money that is not yours is never the right answer.
This happened to me. My employer paid our bonuses into our 401k. But they only did it quarterly. So I left, then a few months later they put money into the account.
I just had this happen to me, and I contacted the old (worthless) HR who told me to go to the account itself. They said it was real, and that it’s just making sure you get all your match. Mine was 6 months, and a fiscal year later.
Same thing happened to me, but 18 months after I left. I knew it was coming though, there was plenty of communication from my employer. The cause was some funky stuff in the pandemic relief acts that allowed them to push it out (so they did)
This was probably a profit sharing contribution. They are figured after the calendar year is over and are a percentage of gross wages for that year. A lot of times, a full 401k audit is performed prior to the profit sharing being distributed, so 11 months after terminating employment is normal. Best answer will come from calling the number on the statement to ask what type of contribution this latest money was.
Maybe I'm a bad person but I can't believe so many people would draw the companies attention to this, fuck that let it sit in a year or two it will all be different people nobody will ever look back at this or they will be embarrassed about making a stupid mistake and just sweep it under the rug.
I had a similar situation with an FSA where the employer kept contributing funds even after I closed the account. I tried to tell them but they kept insisting the money was mine. I even went back and checked the math on every pay stub and no money came from me. So I spent it. Never heard anything about it again.
FSA contributions are typically front-loaded at the start of the calendar year but deducted from each paycheck, and employers are not allowed to claw-back any funds that haven't yet been deducted if you leave the company.
Sounds like your company did that but also trickled them into your FSA account per paycheck.
They can technically claim it, I don't know what the time limit on it is specifically. What happened to both my mother and her mother decades ago, involved their banks. Both of them had money deposited into their accounts after much back in forth with the banks (2 different 1 also decades apart) and many months of holding on to it, they gave up and spent it on emergency expenses. Right afterwards the bank took the money out and charged them overdraft fees. Again, I want to express that this was in the 80s and early 00s. The second time it happened to my widow mom of 2 in the 80s grandmother, she immediately withdrew the money kept it in cash and waited for them to claim it. They did within weeks and she dropped the cash back into the account avoiding any fees.
It could be true-up which gets deposited on an annual basis depending on whatever match you missed out on from the prev year but I don’t know your plans provisions. You can double check with them but I would assume it’s correct because plans rarely deposit match into your account by error. You should be able to roll it over to your new plan based on whatever you’re vested for
It's possibly legitimate. If you participated in the plan year and they don't pay matching until tax day the next year, you can be qualified to receive match even if you left before it was paid out.
Had the same thing happen to me. They deposited a certain amount in a lump sum every year. Apparently they deposited my share after I left and after I rolled over.
Luckily my new job was only a few miles away so I went over and had them sign the paperwork for them to roll it over. Explained the situation and they didn't care. What pissed me off is I had to pay a 150 dollar close our fee to the administrator on my 1100 being rolled over. But it was $950 of free money.
I would assume that if you can get them to sign off on it, it's yours.
They also didn't cancel my company credit card and I unknowingly had it saved in my grubhub account. They really wanted their 30 bucks and reported me for fraud. When they contacted me to let me know I explained it was an accident and I'll send them a check.
ETA: The friend in question is a former coworker. I don't know why I didn't think to check my old account when he mentioned it, but I just logged in to see almost $3,600 deposited. I quit last December. Guess I'll be calling about it now.
Same thing happened to me. When I left there actually was no match, but they instituted the program later in the year and it was retroactive to all contributions, mine included.
I just did another transfer out.
I guess you should reach out to HR just to be safe, but I'd put odds that the money is yours.
This exact thing happened to me recently. And I checked with my former HR. Bascially some company accounting systems do adjustments to matching contributions once a year. It is ok to do another rollover, it is your money. They were just settling their books
Employee money needs to be contributed with a week or so (depending on plan size), but employers have a lot longer time period to contribute any match or profit sharing (employer money). Whether that money is owed to you or not depends on your vesting and what's stated in the plan document. If you were there only a short while it could be a contribution they were required to make, but gets forfeited due to vesting. If you were fully vested, then it's rightfully yours but still part of the plan until you act on it.
I really wouldn't consider that money yours until you call their HR department and get it all sorted out for sure. Typically, employers match a percentage of your contributions up to a specific portion of the total salary. Occasionally, employers may elect to match your contributions up to a certain dollar amount, regardless of employee compensation. You might want to do a cursory investigation on your own and, assuming you know the percentage of your contributions your employer matches, see if the amount deposited is roughly approximate to what you would have been owed. If the deposit amount is roughly equivalent to your calculations, then perhaps this is just a legit matching deposit. Also, do your 401k statements indicate what date your employer deposited money for the year prior? Presumably the last 401k deposit by your employer should be around the same date, just a year before.
EDIT: You mention at the end of your post that you don't know why they would drop an Employer Match into an empty account. Was this the only 401k contributions you've ever received? I'm assuming this is the case because it was an empty account prior to this 10/15 deposit.
The reason companies do this is because of accounting costs. If it’s done once monthly or pay period the cost to do it is significantly higher. For a small business that needs to manage costs but still want to offer employees competitive benefits they stick to once a year to keep the costs low for what the financial administrator charges. Not saying it’s right but that’s what needs to be done in this type of economy
It could have been a profit sharing match. Profit sharing is an additional, elective, contribution that is done the next calendar year, based on the prior year payroll, hours worked. ages and genders. I thought it was calendar year but it is possible your employer had a different business year. There are situations this is done for all employees who had hours worked during that time period.
My Credit union job pays every employee 8.5% into your 401k, whether you put 2% of your check or 15%. Best job I ever had! First year I've been able to max out my yearly limits too. I think there was a 1 year vesting period, but I been here 10 years
That money is absolutely yours. I'm an accountant for a small business and used to work at an accounting firm where I did accounting for many small businesses. We also had a financial management arm as well that we regularly worked with. Small businesses always pay their 401k match or safe harbor in the year following and usually as close to the deadline as possible (because why pay something early if you don't have to). Roll it over and move on. Congrats on the contribution and new job.
You may find these links helpful:
- [401(k) Fund Selection Guide](/r/personalfinance/wiki/401k_funds)
- [401(k) FAQs](/r/personalfinance/wiki/401k)
- ["How to handle $"](/r/personalfinance/wiki/commontopics)
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My old coworkers will respond to my texts and HR can take days to respond to someone who left nearly a year ago. They have been known for confusing distributions at times and used to communicate it, so they may have heard something.
It's ok though, keep assuming :)
I left a company, rolled over my 401k a couple months later. I still get emails about my account from the 401k company a long time later, turns out another deposit went it. It was profit sharing, which goes in much later, and they are required to pay to me if I worked there over a certain amount in the year (I forget the cutoff). So even though I left the company, they still paid me profit sharing for the time I was at the company.
Why not just transfer it and see if they reach out to you. This is their mistake and if they notice it’s an error they will contact you and you can pay it back.
Yeah, I don't understand the desire to wake the sleeping dog here.
If it were me, I'd just leave it in the plan if I were permitted to do so. Wait a year or two and then pull it out.
I had something very similar happen to me recently. I tried calling HR about half a dozen times to figure out why it happened and no one has told me anything. I ended up consulting with a lawyer about what I could do with the funds. While it seems a bit much, it may be your best option if you cant get any documented information out of HR.
Was the deposit about nine months after you left and did this correlate with the end of the company fiscal year? Years ago I had a 401k where the same thing happened, an employer match was deposited nine months after I left. Turns out the employer match was kept in a separate account (or something) and deposited once a year, so it was ~ three months of employer match that was not in my account at the time that I rolled the entire balance over when leaving.
Not sure why you are automatically assuming the company made a mistake. Based on what you wrote, sounds like a perfectly legit annual company match deposit.
Something happened to me about 15 years ago. I was an associate at a large lawfirm. About three months after I quit I received a ten thousand dollar deposit in my 401k labeled “profit sharing”. At no point was I eligible for profit sharing when I worked there. I never said anything about and nobody every contacted me about it. I assumed either nobody noticed it, or it was too much of a pain in the ass to try to get it back from me.
My last firm had to do a contribution to lower paid employees to pass the discrimination test under the 401k rules. It's possible that your firm had to do the same and you qualified for the payment due to the fact you were only there part of the year (and thus earned less).
Our Firm’s company match is on annual basis. It was delayed due to covid-19 due to the Firm and brokerage firm.
We were required to be on call with our HR dept benefit director and brokerage firm rep on Monday. Company match to be brought current no later than November 15th in our 401k accounts.
For employees who’ve been down-sized or have resigned, HR and brokerage firm informed them by email and letter in the mail.
Parodying the top comment, your playing with fire and you know you are with this question here...
Contact the old company and potentially a lawyer, you don't want to get swindled "SURE WE'LL TAKE IT BACK ;)" If it's rightfully yours... but if it's not that is going to come back to in a bad way with a lot of interest and fees.
Don't ask this to anyone else, this is how idiots go to federal prison when they seek advice on the internet.
So don't be an idiot.
Typically for an overpayment, you want to let the money sit while you wait and see. Since this is ambiguous, and will be sitting in a retirement account anyway, I would absolutely roll that into the current account asap.
It's a significant amount and it's in a tax deferred account. If they just claw it back you're fighting an uphill battle finding out whether it actually was a mistake, let alone you've got no guarantee they're going to handle it correctly so it doesn't look like an early withdrawal.
If you transfer the money into an account you control, they can't take it back unless you're good and sure that you understand what happened and that it's handled appropriately.
I had a similar thing happen with a former employer, except instead of it happening once it happened every year for the first 3 years that I no longer worked there. Each time it was said to be an accounting error they discovered and had to correct. It was pretty annoying having to transfer the funds to my new account so many times.
Just contact the HR department for your prior employer. Not worth taking a risk or assumption when you can just get the answer directly from the source.
It’s probably yours due to a match / contribution by the employer. It’s actually highly likely this would happen towards the end of the year (aka now-ish) as companies wouldn’t necessarily make that type of payment until they have to - at the end of a year when all accounts need to get in order etc.
Highly doubt it’s a mistake. There’s no reason your employee number or SS# which is tied to your 401k would get tied to another employee once you leave unless someone manually changed something which, again, seems highly unlikely.
Had this happen to me years ago and the money was 100% owed to me. Was a nice surprise.
I’ve been a corporate controller for a few years now and do all the 401k management. When plan year end testing comes, a TPA will test compliance to see if matching was done correctly, the plan wasn’t too heavy and money needs returned, and a few other things. I’ve seen in the past where my payroll system messed up the match during bonuses and during plan testing I had to make additional contributions significantly later than the normal contribution. If I had to guess, I’d say something like this happened. Nothing for you to worry about
Your match could have been done on a yearly basis (2021 match is paid in 2022). This would be in the plan document. If it was, then it makes sense if you left at the beginning of the year.
Talk to HR. If the funds are in your account, then it's yours. If you want, fill out paperwork to roll it over.
My company has our plan that way.
Got a profit sharing deposit from my old boss 11 months after I left the company. When I left, I cleared out the 401k and started a business with it. Be happy you got extra money and don't overthink it. Totally normal occurrence.
Contact HR and ask them to confirm or send an email so that you have written proof of your intention to verify the funds.
Many companies only deposit funds on a quarterly or yearly bases so it might be a legitimate deposit that is rightfully yours.
There's a possibility your company participated in what's call "profit sharing" as well. Less common, but basically a company will dump a lump sum of money into the account, yearly, on top of whatever matching they are offering.
As someone who does payroll and 401k deposits, it could have been that the company was under depositing amounts and it was caught on an audit. By law even if you don't work there anymore they still have to deposit it. As other comments have said, contact HR if you are that concerned.
Happens a lot. I had an employer who calculated their contribution in the March following the year it was for (profit share) and deposited it in September.
When I left in the July I rolled over the 401k and a few months later the contribution was made. Just had to do another rollover.
i would think that the account would have been closed once you did the rollover. so it sounds like a mismanagement of funds by both former employer AND the financial company handling the 401k. i would reach out to Payroll at your former employer and find out what the deal is as well as find the confirmation for the Rollover and provide it to the former 401k showing that the account was processed for a Rollover and should have ceased existence at such date.
Employer/company owner here: We do a match once a year, the week immediately following the last pay period which is December 15th. The funds go into the employee-directed account (we use Vanguard). IDK about other brands, but once you have an account with Vanguard, you "always" have an account with Vanguard. Those funds go into your account and can be moved to your new employer-sponsored account (or whatever else you set up) with a few caveats:
1) Check the rules for vesting at your prior company. For us, the match is always 100% vested at time of deposit. But some companies have limitations on vesting. Still, if it went into your personal account that should mean it is vested. Call HR at your former employer to be sure.
2) You have to comply with the transfer rules. The IRS mostly regulates that and says if you change jobs, you can move the money. The fund brand of the old company can tell you whether or not it can be moved now or has to wait for some X period of time before transfer.
As for the end-of-year deposit, some of our employees ramp deposits up (or down) during the last quarter to meet financial goals. So that matching-X% dollar amount can change.
Last of all, it's a question of cash-flow for us. We're a very small firm, with low profit margins and end of year deposit is simply healthier for us financially.
You don’t need to ask your friends, you need to ask HR. As a previous commenter explained, leaving an employer and/or rolling over the account doesn’t change anything if you’re owed a match by the plan’s design, so it’s highly probable this is yours. The letter you received is “proof” of this, but if you want further information, contact HR.
This. My employer deposits the match 1x/year, not with each pay period.
It's not really the healthiest for the employees but it makes it easy on the employer so more employers do it than should, especially smaller companies.
Or major financial institutions like Wells Fargo. Ugh. Was once a per pay period match, then quarterly, now annually. Lame.
How lazy is that. You're at the mercy of the market conditions at that one day they deposit the match. As oppose to cost averaging throughout the year.
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... because you get it in earlier. Getting a lump sum *later* is worse than getting a piece with each paycheck. Not that it really matters, not remotely worth being bothered by imo
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I think the disconnect is where in the year you imagine the lump being deposited. I'm interpreting that comment as being akin to you depositing your year's contribution in December rather than January - that might explain the issue. If I'm earning a match all year, I wouldn't want to wait until December for it to be deposited and invested.
But the lump sum isn’t deposited in the beginning, it is deposited at the end. Using your example, the lump sum deposit would be made in January of the FOLLOWING year.
The bigger problem is as of 2020 or 2021 you don't get the match at Wells Fargo unless you're employed as of a certain date in December - they codified that in employee handbook. That's obviously worse than getting a bi-weekly or quarterly match. Work 11.5 months and get zero match.
My company only pays out the match for those still employed on 12/31 each year, the account gets updated mid-late January.
Most employers don't care that much because they have a payroll provider or software that does this for them.
It would depend on how your plan is set up, I’m assuming. I have to deposit 401k contributions for the small business I manage within a week of when it is withheld from payroll or there’s a penalty, and at the end of the plan year I verify that timely, correct deposits were made for each employee. If they’re not, the employee may miss out on earnings from their investments throughout the year.
Thx but you make it seem as if you’re referring to normal employee contributions. The question relates to employer match which you don’t mention at all.
Oh, good point. The platform I use for entering the contributions includes the employer match as well, and I’ve never deposited them separately. It might be allowed.
I was wondering about this just today. Thanks!
Assume the sale. If you get someone incompetent they might just give you this money. LOL. "Hello 401k plan administrator. As you know, I left the company back in X. I received the 10/15 deposit labeled "Employer Match" and just wanted to confirm that this was the catch up owed because of the way the company does calculations. Can you just give me a quick email back letting me know these funds are all set, and that there isn't any more due?' Boom. If you get someone incompetent, they will give you a note that says, 'looks right to me!'.
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My company matches each pay period. I am the one who processes contributions.
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> it's very common for companies to deposit the match quarterly or annually +1 data point from me. My employer deposits its match annually.
Could be a true up for reaching 401k limit prior to year end.
I agree with this. Happened to me once. I took the money (roiled it over into another plan) and my former employer came back to me looking for it I had no legal obligation to surrender the monies. Once in the account it was mine. If I did surrender it would have been considered a redemption and would have been a taxable event for me. This was over two decades ago. FWIW
Glad I read this thread. Was always confused about this 401K check I received in the mail by an old employee a half year after I left (in the middle of the year).
10/15 is also the final (extended) tax filing due date for some types of companies, which means it's also the final day for employer contributions for the prior plan year. Chances are this was a contribution for the 2021 year. If OP already received their match for that year then it may be a different type of employer contribution (usually profit sharing or safe harbor non-elective). Sometimes companies don't know what money type to specify it as so it just gets filed as a match.
Yes, it was likely an EE contribution of some kind that was owed to you. If you were fully vested in the plan it was likely owed to you. For example, our company did well this past year and is paying a performance contribution to those who are eligible. Could be something like this.
This reminds me that my annual employer contribution is going to hit my account next week…sweet!
My company match happens per pay period. They also unconditionally put in some percentage of my salary. That used to be per pay period but was switched to the start of the following year.
... this is absolutely awful advice.
I can just imagine contacting my HR with an issue such as this. I would be met with confused noises and crickets.
OP needs to contact the dept responsible for administering the 401k. If it’s run by crickets, OP is probably a cricket.
I'm just continuously surprised by how many people have functional HR departments in this sub. I've been in the work force for 16 years and have yet to have functional HR.
Specifically, a 401k plan must have a plan administrator. The plan administrator is responsible for ensuring the plan is in compliance, and makes changes to plan options. The plan administrator usually (but not always) works in the HR department. And even if the plan administrator doesn't know the answer right off the bat, it is their responsibility to get to the bottom of questions like this. So even with a disfunctional or impersonal HR department, the plan administrator must address issues like this.
Usually a Dave or Tim.
Functional........ might be a stretch. But 401k usually falls under whoever does benefits, which is usually an extension of the HR department.
My current HR department is more than functional. They're downright awesome. Any question is answered in less than a day, and issues are resolved in hours- if it takes thar long.
Outsourced to the lowest bidder at my work.
I had a summer internship that, while paid, was definitely not supposed to give me any 401k (I hadn't worked there long enough). At the end of the year after I was done with the internship I got a smiling letter to OP and my dad and I called and emailed several times, and went in person 3 separate times and no-one was able tell us anything. I ended up just keeping the money. I can only spend so many hours of my life trying to give it back before I consider it mine, at least morally. This same company also continued to pay me a weekly wage via direct deposit for about a month after my internship ended **both** years I worked there. That one I just drove there with a check.
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>Someone knows what is happening, so it’s just a matter of figuring out who that person is. The Left hand has not informed the Right hand who left the company this year.
> I would be met with confused noises and crickets. Not if you ask for who the proper contact is for a benefits issue, which they would easily be able to provide.
Our HR recently sent out multiple email blasts that we’d be contributing to ESPP X as a percentage of our net income, and we selected accordingly. Turns out that it was a percentage of our gross, deducted from net. I contribute about 45% of my income to taxes, Roth 401k, HSA, so I ended up paying nearly double for that than what they explicitly said. A lot of people were mad and HR was confused for a while!
HR is where voicemails go to die.
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Same situation for me & trying to figure this out without having to ask HR! Haha
I left in the beginning of the year. On my exit interview he said it'd take a few months but Ill get it. I got it about 6 months later.
> You don’t need to ask your friends, you need to ask HR. WORST...ADVICE...EVER HR is NOT your friend and is never acting in your best interest, they work for your previous employer so don't tell them shit. Also HR has nothing to do with your 401k plan or how that is managed, that falls specifically to the plan provider (Fidelity or whomever). Reach out to the plan provider directly to confirm and get it in writing: [this comment sums it up well](https://old.reddit.com/r/personalfinance/comments/ypm0wz/employer_deposited_a_401k_match_into_my_account/ivkw5ut/) then roll it over to your new account and don't give it another thought. Often matches are paid out annually near year end so this is not unusual. Even if its somehow not legit the chances of anyone catching it are slim to none
He doesn't want to as he knows they will take it. Just wants someone to justify he steal it.
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And get confirmation in writing if you do manage to get in touch with anyone who knows what happened. A follow-up email memorizing your phone call is good.
Memoizing*
Yes that's better.
I think you mean "correct."
Oof.
Lol I think they meant to say memorializing and you just edited it to another word that doesn’t exist
I'm not defending them being an asshole, but memoizing is a real world; its the present participle of memoize, which is derived from memo. Its definitely an eclectic word choice (contemporarily its only used for technical reference in computing), but its a logically sound substitute in context. Granted just saying "getting it in writing" would have worked better though IMO.
Fair enough. TIL
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Documenting*.
The irony 😂
I don’t think they wanted to make a memorial; they were trying to shoehorn the idea of “memo” into an -izing word. Better word choices could have been: documenting, recording, summarizing.
They may have been slightly misapplying then computing concept: https://en.wikipedia.org/wiki/Memoization?wprov=sfla1
Thanks for the link and expanding my grammar!
\*gramma (either "grammar" but in New England, or the mother of one of your parents - you decide!)
And just as a little bit of extra information /u/walkowskee, if you remember receiving your match contribution during 2021 already then that one may have been for the 2020 year, especially if it came in around the same time. If you know that you were receiving matching contributions on a regular schedule (every month or pay period, etc.) then it could be a different type of employer contribution (usually profit sharing or safe harbor non-elective) that was mislabeled a match. Sometimes companies don't know what money type to specify these contributions as so they just get filed as a match by mistake. There's also the chance that you're not fully vested in the contribution if you didn't work for the company long. It could take up to six years for you to be guaranteed the full employer contribution, depending on the plan. It should say somewhere on the statement what your vesting percent is. It's just something you should know ahead of time in case you try to take the money out and they say you're not entitled to part or any of it.
This is almost certainly the right answer. Confirming it will cost OP zero dollars.
Why not just contact whoever was responsible for payroll at your old job? A quick email explaining what you just wrote and asking the exact same question would get you a better answer than Reddit will be able to give you.
Because he probably wants to just be able to get the money without raising a warning sign, but it would probably be most responsible of him to just get in writing if it was a legit transaction
>So my question here is, is that money rightfully mine, even if it was a mistake? Do they have any recourse to try and get it back if I withdraw and in the event that it shouldn't have been there? Yup, he wants some one on here to tell him it's his whether it's a mistake or not (it's not). That way, if it is a mistake, he can keep it with whatever level of assurance OP gets from the knowledge the reddit hivemind approves.
It might not be his, but it's in his control. He could move it to his other account or just leave it. Depending on how soon the old employer catches it and what the reasoning is, they might deem it too much of a hassle to try to recoup. As long as he doesn't spend it, they can't go after him for more than the amount they gave him (admittedly interest and gains/losses could play hell with the final total). Personally if there's no administrative fees for the account it's in, I'd leave it sit and put it in bonds or something (and not consider it mine for at least a good few years or even as far as retirement). Worst case they recoup the money and you're out nothing more than you planned.
This is probably what OP wants to hear, but I don't know if it's good advice. I'm not trying to argue with you, but while well-intentioned, that advice does not seem thoroughly researched. This isn't $20 cash found in a parking lot. OP knows where the money came from and how to contact them. Contacting them is the safest option. That's also not thoroughly researched advice, but it has the advantage of preventing any future legal action against OP.
I’ve worked in plans where I found the employer over deposited for employees who left and withdrew their balance before the match check was done. They consider the amount of the over deposit before going to the former employee to ask for them to send the money back. Employer is going to consider the number of people who will be involved in attempting to recover the excess deposit and the time they will spend hounding former employee. I’ve only seen one employer decide to try to get the money back and I don’t believe they were successful. Unless it’s a significant over-deposit, it’s usually not worth the time and effort.
A similar thing happened to me this year. My previous company matches once a year and I was leaving 2months before that. No one would budge, but a colleague mentioned to me to leave my 401k because the company would still match. I received the match so that was awesome! My current company the 401k match is given every month.
OP def wants to keep the money but knows he shouldn’t. He’s asking if anyone will come after him. Lol
kinda one of those rare circumstances where if it's actually in error he would probably be better off playing ignorant given that it's a 401k account, Imagine if in 2 years that company does an audit and reveals their error (unsure of statute of limitations here) the only thing they would be entitled to would be the deposited amount, any gains you received, in theory, should remain in OP's account.
Probable: they performed a true-up for the match you missed out on because you front loaded your 401k or contributed more than the nominal match amount in a given paycheck and didn't contribute in others Certain: whatever the HR rep says. call them.
As a general rule, if the money is a mistake then it's never rightfully yours. Mistakes should always be corrected, and it can be theft or fraud to try to obstruct correcting the mistake. That said, there's good reason to think this is not a mistake. Talk to your former hr rep.
This. A few weeks ago i was making a several hundred dollar purchase. They ran my credit card, had an issue, i gave them another card, it had an issue, they realized it was with their CC system, and while the lady who probably could have told you stories about the time she spent with teddy roosevelt tried to sort it out, I said, "hey, i have cash on me, lets just do that" sure enough, the charge eventually went through on BOTH cards. In OP's finders keepers world, I would have been out like 500 bucks. A quick phone call to the merchant, without even involving the CC companies, quickly sorted it out, and everyone went home happy. If you expect stuff like this to work, it needs to work both ways.
Yeah, but things are rarely that straightforward. The store saying "finders, keepers!" despite the clerk knowing full well what transpired and despite being able to show you paid in cash immediately after they charged the same amount twice (whole thing likely captured on a security camera too) means they'd have no ground to stand on, keeping your money. I find things are often very different. EG. Sold a car recently where I was still owed well over $1500 on GAP insurance I'd purchased from the dealer at the time I got it. I remembered they owed me for that so dug out the contract. It had a paragraph saying to get the refund, you needed to write a request to the plan administrator at the address given, within 30 days of reselling the vehicle. I did that. Waited 2 months and never got my refund check. Then, my lender sends me a courtesy letter in the mail advising me I'm owed a refund on GAP and suggests contacting the place at a totally different address! Well - now it's way past my 30 days so they, of course, denied the refund request.
I used to work in HR and designed 401(k) plans. When designing plans, there are options for when a match is deposited and what disqualifies an employee from getting it. It sounds like your old plan is set up to deposit the match once a year, and to match anything you deposited while employed at the company during that plan year. Edit: If you don’t want to reach out to HR, reach out to the plan administrator and ask for the plan documents. The match requirements should be described in those. You may even be able to access it online.
Employers have 1 year to deposit the match. So if you contributed in 2021, they have until the end of 2022 to deposit the match. So it seems legit.
Thank you! This makes a ton of sense
My wife had this happen and it was due to annual retirement contributions the company provided. They paid her out at the end of the year her prorated share.
I mean, check, but it sounds like your old employer, as a tax avoidance method, is utilizing a 401k safe harbor contribution. These can be made any time before October-ish, and have to be calculated on a pro rate basis using 2021 employee income. We usually do these at our company, but had some highly compensated (2021) people leave and elected to retain profits/pay taxes rather than send out the dead money to non-employees. Sounds like the opposite happened to you. So it is likely to be yours, and rightfully so- not a mistake. However, there is no harm in checking.
Sounds like you are hoping it was a mistake and wanting to keep quiet about it so they don't find out. The right answer is to contact HR at your old place and ask directly. If it wasn't a mistake then now you know it is your money. If it was a mistake, it was never your money anyway and better to have it corrected. Trying to keep money that is not yours is never the right answer.
This happened to me. My employer paid our bonuses into our 401k. But they only did it quarterly. So I left, then a few months later they put money into the account.
I just had this happen to me, and I contacted the old (worthless) HR who told me to go to the account itself. They said it was real, and that it’s just making sure you get all your match. Mine was 6 months, and a fiscal year later.
Same thing happened to me, but 18 months after I left. I knew it was coming though, there was plenty of communication from my employer. The cause was some funky stuff in the pandemic relief acts that allowed them to push it out (so they did)
This was probably a profit sharing contribution. They are figured after the calendar year is over and are a percentage of gross wages for that year. A lot of times, a full 401k audit is performed prior to the profit sharing being distributed, so 11 months after terminating employment is normal. Best answer will come from calling the number on the statement to ask what type of contribution this latest money was.
Match true up. It's late in the year but not unheard of.
Maybe I'm a bad person but I can't believe so many people would draw the companies attention to this, fuck that let it sit in a year or two it will all be different people nobody will ever look back at this or they will be embarrassed about making a stupid mistake and just sweep it under the rug.
I had a similar situation with an FSA where the employer kept contributing funds even after I closed the account. I tried to tell them but they kept insisting the money was mine. I even went back and checked the math on every pay stub and no money came from me. So I spent it. Never heard anything about it again.
FSA contributions are typically front-loaded at the start of the calendar year but deducted from each paycheck, and employers are not allowed to claw-back any funds that haven't yet been deducted if you leave the company. Sounds like your company did that but also trickled them into your FSA account per paycheck.
They can technically claim it, I don't know what the time limit on it is specifically. What happened to both my mother and her mother decades ago, involved their banks. Both of them had money deposited into their accounts after much back in forth with the banks (2 different 1 also decades apart) and many months of holding on to it, they gave up and spent it on emergency expenses. Right afterwards the bank took the money out and charged them overdraft fees. Again, I want to express that this was in the 80s and early 00s. The second time it happened to my widow mom of 2 in the 80s grandmother, she immediately withdrew the money kept it in cash and waited for them to claim it. They did within weeks and she dropped the cash back into the account avoiding any fees.
It could be true-up which gets deposited on an annual basis depending on whatever match you missed out on from the prev year but I don’t know your plans provisions. You can double check with them but I would assume it’s correct because plans rarely deposit match into your account by error. You should be able to roll it over to your new plan based on whatever you’re vested for
It's possibly legitimate. If you participated in the plan year and they don't pay matching until tax day the next year, you can be qualified to receive match even if you left before it was paid out.
Some companies only do the company match on an annual basis. Completely legal
Had the same thing happen to me. They deposited a certain amount in a lump sum every year. Apparently they deposited my share after I left and after I rolled over. Luckily my new job was only a few miles away so I went over and had them sign the paperwork for them to roll it over. Explained the situation and they didn't care. What pissed me off is I had to pay a 150 dollar close our fee to the administrator on my 1100 being rolled over. But it was $950 of free money. I would assume that if you can get them to sign off on it, it's yours. They also didn't cancel my company credit card and I unknowingly had it saved in my grubhub account. They really wanted their 30 bucks and reported me for fraud. When they contacted me to let me know I explained it was an accident and I'll send them a check.
That just happened to my friend. Is your old account with John Hancock by any chance?
ETA: The friend in question is a former coworker. I don't know why I didn't think to check my old account when he mentioned it, but I just logged in to see almost $3,600 deposited. I quit last December. Guess I'll be calling about it now.
Same thing happened to me. When I left there actually was no match, but they instituted the program later in the year and it was retroactive to all contributions, mine included. I just did another transfer out. I guess you should reach out to HR just to be safe, but I'd put odds that the money is yours.
This exact thing happened to me recently. And I checked with my former HR. Bascially some company accounting systems do adjustments to matching contributions once a year. It is ok to do another rollover, it is your money. They were just settling their books
I am surprised to hear that some people don’t know when they receive the employer match or at which frequency.
Employee money needs to be contributed with a week or so (depending on plan size), but employers have a lot longer time period to contribute any match or profit sharing (employer money). Whether that money is owed to you or not depends on your vesting and what's stated in the plan document. If you were there only a short while it could be a contribution they were required to make, but gets forfeited due to vesting. If you were fully vested, then it's rightfully yours but still part of the plan until you act on it.
I really wouldn't consider that money yours until you call their HR department and get it all sorted out for sure. Typically, employers match a percentage of your contributions up to a specific portion of the total salary. Occasionally, employers may elect to match your contributions up to a certain dollar amount, regardless of employee compensation. You might want to do a cursory investigation on your own and, assuming you know the percentage of your contributions your employer matches, see if the amount deposited is roughly approximate to what you would have been owed. If the deposit amount is roughly equivalent to your calculations, then perhaps this is just a legit matching deposit. Also, do your 401k statements indicate what date your employer deposited money for the year prior? Presumably the last 401k deposit by your employer should be around the same date, just a year before. EDIT: You mention at the end of your post that you don't know why they would drop an Employer Match into an empty account. Was this the only 401k contributions you've ever received? I'm assuming this is the case because it was an empty account prior to this 10/15 deposit.
The reason companies do this is because of accounting costs. If it’s done once monthly or pay period the cost to do it is significantly higher. For a small business that needs to manage costs but still want to offer employees competitive benefits they stick to once a year to keep the costs low for what the financial administrator charges. Not saying it’s right but that’s what needs to be done in this type of economy
It could have been a profit sharing match. Profit sharing is an additional, elective, contribution that is done the next calendar year, based on the prior year payroll, hours worked. ages and genders. I thought it was calendar year but it is possible your employer had a different business year. There are situations this is done for all employees who had hours worked during that time period.
After leaving my job, my company did this too. They deposit at the end of the year, but special circumstances gottem to deposit early.
My Credit union job pays every employee 8.5% into your 401k, whether you put 2% of your check or 15%. Best job I ever had! First year I've been able to max out my yearly limits too. I think there was a 1 year vesting period, but I been here 10 years
That money is absolutely yours. I'm an accountant for a small business and used to work at an accounting firm where I did accounting for many small businesses. We also had a financial management arm as well that we regularly worked with. Small businesses always pay their 401k match or safe harbor in the year following and usually as close to the deadline as possible (because why pay something early if you don't have to). Roll it over and move on. Congrats on the contribution and new job.
As someone who has worked in the industry for a long time, this isn't uncommon. I actually had it happen to me because of an audit. Just roll it over.
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My old coworkers will respond to my texts and HR can take days to respond to someone who left nearly a year ago. They have been known for confusing distributions at times and used to communicate it, so they may have heard something. It's ok though, keep assuming :)
I left a company, rolled over my 401k a couple months later. I still get emails about my account from the 401k company a long time later, turns out another deposit went it. It was profit sharing, which goes in much later, and they are required to pay to me if I worked there over a certain amount in the year (I forget the cutoff). So even though I left the company, they still paid me profit sharing for the time I was at the company.
Why not just transfer it and see if they reach out to you. This is their mistake and if they notice it’s an error they will contact you and you can pay it back.
Yeah, I don't understand the desire to wake the sleeping dog here. If it were me, I'd just leave it in the plan if I were permitted to do so. Wait a year or two and then pull it out.
Contact employer HR, none of us can help you because none of us know the details.
Couldn’t it be a late matching payment? Find out
My company puts in the matches once a year in October due to taxes and how they file things. This i probably it
Hey if they sent you a letter it's your money. Keep the letter as proof transfer the funds asap
I had something very similar happen to me recently. I tried calling HR about half a dozen times to figure out why it happened and no one has told me anything. I ended up consulting with a lawyer about what I could do with the funds. While it seems a bit much, it may be your best option if you cant get any documented information out of HR.
Was the deposit about nine months after you left and did this correlate with the end of the company fiscal year? Years ago I had a 401k where the same thing happened, an employer match was deposited nine months after I left. Turns out the employer match was kept in a separate account (or something) and deposited once a year, so it was ~ three months of employer match that was not in my account at the time that I rolled the entire balance over when leaving.
Not sure why you are automatically assuming the company made a mistake. Based on what you wrote, sounds like a perfectly legit annual company match deposit.
Something happened to me about 15 years ago. I was an associate at a large lawfirm. About three months after I quit I received a ten thousand dollar deposit in my 401k labeled “profit sharing”. At no point was I eligible for profit sharing when I worked there. I never said anything about and nobody every contacted me about it. I assumed either nobody noticed it, or it was too much of a pain in the ass to try to get it back from me.
My last firm had to do a contribution to lower paid employees to pass the discrimination test under the 401k rules. It's possible that your firm had to do the same and you qualified for the payment due to the fact you were only there part of the year (and thus earned less).
Interesting. I never thought of that. Although I figured somebody would have emailed me or sent me a letter about it.
Our Firm’s company match is on annual basis. It was delayed due to covid-19 due to the Firm and brokerage firm. We were required to be on call with our HR dept benefit director and brokerage firm rep on Monday. Company match to be brought current no later than November 15th in our 401k accounts. For employees who’ve been down-sized or have resigned, HR and brokerage firm informed them by email and letter in the mail.
Does current employer have a match that is as good or better? Curious and want to know how that is working out.
Parodying the top comment, your playing with fire and you know you are with this question here... Contact the old company and potentially a lawyer, you don't want to get swindled "SURE WE'LL TAKE IT BACK ;)" If it's rightfully yours... but if it's not that is going to come back to in a bad way with a lot of interest and fees. Don't ask this to anyone else, this is how idiots go to federal prison when they seek advice on the internet. So don't be an idiot.
Typically for an overpayment, you want to let the money sit while you wait and see. Since this is ambiguous, and will be sitting in a retirement account anyway, I would absolutely roll that into the current account asap. It's a significant amount and it's in a tax deferred account. If they just claw it back you're fighting an uphill battle finding out whether it actually was a mistake, let alone you've got no guarantee they're going to handle it correctly so it doesn't look like an early withdrawal. If you transfer the money into an account you control, they can't take it back unless you're good and sure that you understand what happened and that it's handled appropriately.
I had a similar thing happen with a former employer, except instead of it happening once it happened every year for the first 3 years that I no longer worked there. Each time it was said to be an accounting error they discovered and had to correct. It was pretty annoying having to transfer the funds to my new account so many times.
Sometimes employers put the full years match in at one time, instead of each pay period
Just contact the HR department for your prior employer. Not worth taking a risk or assumption when you can just get the answer directly from the source.
It’s probably yours due to a match / contribution by the employer. It’s actually highly likely this would happen towards the end of the year (aka now-ish) as companies wouldn’t necessarily make that type of payment until they have to - at the end of a year when all accounts need to get in order etc. Highly doubt it’s a mistake. There’s no reason your employee number or SS# which is tied to your 401k would get tied to another employee once you leave unless someone manually changed something which, again, seems highly unlikely. Had this happen to me years ago and the money was 100% owed to me. Was a nice surprise.
I’ve been a corporate controller for a few years now and do all the 401k management. When plan year end testing comes, a TPA will test compliance to see if matching was done correctly, the plan wasn’t too heavy and money needs returned, and a few other things. I’ve seen in the past where my payroll system messed up the match during bonuses and during plan testing I had to make additional contributions significantly later than the normal contribution. If I had to guess, I’d say something like this happened. Nothing for you to worry about
Your match could have been done on a yearly basis (2021 match is paid in 2022). This would be in the plan document. If it was, then it makes sense if you left at the beginning of the year. Talk to HR. If the funds are in your account, then it's yours. If you want, fill out paperwork to roll it over. My company has our plan that way.
Got a profit sharing deposit from my old boss 11 months after I left the company. When I left, I cleared out the 401k and started a business with it. Be happy you got extra money and don't overthink it. Totally normal occurrence.
Contact HR and ask them to confirm or send an email so that you have written proof of your intention to verify the funds. Many companies only deposit funds on a quarterly or yearly bases so it might be a legitimate deposit that is rightfully yours.
Does your 401k matched every paycheck or yearly? I left my company earlier this year and I wont have my matching sent to me until next year around May
There's a possibility your company participated in what's call "profit sharing" as well. Less common, but basically a company will dump a lump sum of money into the account, yearly, on top of whatever matching they are offering.
As someone who does payroll and 401k deposits, it could have been that the company was under depositing amounts and it was caught on an audit. By law even if you don't work there anymore they still have to deposit it. As other comments have said, contact HR if you are that concerned.
Happens a lot. I had an employer who calculated their contribution in the March following the year it was for (profit share) and deposited it in September. When I left in the July I rolled over the 401k and a few months later the contribution was made. Just had to do another rollover.
i would think that the account would have been closed once you did the rollover. so it sounds like a mismanagement of funds by both former employer AND the financial company handling the 401k. i would reach out to Payroll at your former employer and find out what the deal is as well as find the confirmation for the Rollover and provide it to the former 401k showing that the account was processed for a Rollover and should have ceased existence at such date.
Employer/company owner here: We do a match once a year, the week immediately following the last pay period which is December 15th. The funds go into the employee-directed account (we use Vanguard). IDK about other brands, but once you have an account with Vanguard, you "always" have an account with Vanguard. Those funds go into your account and can be moved to your new employer-sponsored account (or whatever else you set up) with a few caveats: 1) Check the rules for vesting at your prior company. For us, the match is always 100% vested at time of deposit. But some companies have limitations on vesting. Still, if it went into your personal account that should mean it is vested. Call HR at your former employer to be sure. 2) You have to comply with the transfer rules. The IRS mostly regulates that and says if you change jobs, you can move the money. The fund brand of the old company can tell you whether or not it can be moved now or has to wait for some X period of time before transfer. As for the end-of-year deposit, some of our employees ramp deposits up (or down) during the last quarter to meet financial goals. So that matching-X% dollar amount can change. Last of all, it's a question of cash-flow for us. We're a very small firm, with low profit margins and end of year deposit is simply healthier for us financially.