Posted: 8/30/2009 1:04:09 PM EDT
| Like most companies, mine has a 401k. I don't participate, but I have been told they do a match. However, they deduct the match off the top of everyone's salary and use that as the source of the money for the company match. Is this even legal ? Sounds like a fraudulent way to do it, essentially providing a scam that allows employees to exceed the fed limits on the employee contribution. |
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Like most companies, mine has a 401k. I don't participate, but I have been told they do a match. However, they deduct the match off the top of everyone's salary and use that as the source of the money for the company match. Is this even legal ? Sounds like a fraudulent way to do it, essentially providing a scam that allows employees to exceed the fed limits on the employee contribution. I imagine that something is being lost in translation, here. Any exceeding of limits on 401k contributions are pretty hard to conceal, and will bring Fed heat pretty quickly. Exactly why you don't participate in the 401k is the bigger question to me. There are some really, really good reasons to do so. |
| They reduce each employee's salary by the amount of the match, then pay the same amount as a 401k match. I just do IRAs for my wife and I... I can contribute $10k per year that way and I don't have to deal with the guys running my company, who I know are scammers/cheater/liars. |
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If you are talking about pre tax deduction yes it is legal. Are you sure ? So someone can contribute the full legal $15k into his 401k, and the company can reduce that persons salary by the 5% match amount (pre-tax, not after tax) and use that as a company match ? |
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If you are talking about pre tax deduction yes it is legal. Are you sure ? So someone can contribute the full legal $15k into his 401k, and the company can reduce that persons salary by the 5% match amount (pre-tax, not after tax) and use that as a company match ? No. The "Match" must come from the companies coffers, not from the employee's check. Rat them fucking thieves out. If you put 10k of your pretax income into the 401k and your company has a 50% match, the additional 5k comes from "THE COMPANY", it in "NO WAY" comes out off the employees check. PERIOD. Get the feds involved without revealing to the crooks who got them to come looking. If the company is taking extra money from you, how is that in ANY way a "MATCH"? |
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If you are talking about pre tax deduction yes it is legal. Are you sure ? So someone can contribute the full legal $15k into his 401k, and the company can reduce that persons salary by the 5% match amount (pre-tax, not after tax) and use that as a company match ? No. The "Match" must come from the companies coffers, not from the employee's check. Rat them fucking thieves out. If you put 10k of your pretax income into the 401k and your company has a 50% match, the additional 5k comes from "THE COMPANY", it in "NO WAY" comes out off the employees check. PERIOD. Get the feds involved without revealing to the crooks who got them to come looking. If the company is taking extra money from you, how is that in ANY way a "MATCH"? That's what I thought. Thanks for the comments. |
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I've never seen a 401K where the employers do what you say they are doing.
My current one matches 30% on the dollar. Say I set up a 10% pretax deduction, I will lose that 10% on my check because it goes into the 401K along with the 30% on the dollar amount contributed by my employer. But some employers offer a non contributing 401K where only your pretax deductions go into the 401K, if they offer this, I would stick with some type of an IRA. |
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I've never seen a 401K where the employers do what you say they are doing.
My current one matches 30% on the dollar. Say I set up a 10% pretax deduction, I will lose that 10% on my check because it goes into the 401K along with the 30% on the dollar amount contributed by my employer. But some employers offer a non contributing 401K where only your pretax deductions go into the 401K, if they offer this, I would stick with some type of an IRA. |
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Like most companies, mine has a 401k. I don't participate, but I have been told they do a match. However, they deduct the match off the top of everyone's salary and use that as the source of the money for the company match. Is this even legal ? Sounds like a fraudulent way to do it, essentially providing a scam that allows employees to exceed the fed limits on the employee contribution. I hope you misunderstood what they said. In no way should the company match come out of the employee's salaries. That is illegal, for sure. If that is the case, please report them. There are whistleblower numbers you can call that allow you to remain anonymous. But again, I am hoping you misunderstood how it works. Otherwise, they are crooks. |
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Like most companies, mine has a 401k. I don't participate, but I have been told they do a match. However, they deduct the match off the top of everyone's salary and use that as the source of the money for the company match. Is this even legal ? Sounds like a fraudulent way to do it, essentially providing a scam that allows employees to exceed the fed limits on the employee contribution. I hope you misunderstood what they said. In no way should the company match come out of the employee's salaries. That is illegal, for sure. If that is the case, please report them. There are whistleblower numbers you can call that allow you to remain anonymous. But again, I am hoping you misunderstood how it works. Otherwise, they are crooks. +1 But honestly, this sounds like a misunderstanding of "the individual's 401k contribution comes off of their *taxable income*". IE, if you put 10% into your 401k, you only pay tax on 90% of your salary, and their match comes from elsewhere. Now, a bit more cynical, if a company does not offer 401k matching, I'd assume something else would go up, say a better health plan, or a higher base salary. It's a perk, which obviously costs the company bottom line, and they need to make it up somewhere. |
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No, there is no misunderstanding.
If you participate in the 401k, your yearly salary is reduced by the match percentage immediately. This becomes your new annual gross salary. Then the employee contribution election is taken off the monthly gross as it should be and as indicated on the monthly check stub. I told you guys... these fucks are scammers and crooks. |
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Quoted: No, there is no misunderstanding. If you participate in the 401k, your yearly salary is reduced by the match percentage immediately. This becomes your new annual gross salary. Then the employee contribution election is taken off the monthly gross as it should be and as indicated on the monthly check stub. Report them to the IRS. They should only be deducting YOUR contribution off of your gross income before taxes. |
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No, there is no misunderstanding. If you participate in the 401k, your yearly salary is reduced by the match percentage immediately. This becomes your new annual gross salary. Then the employee contribution election is taken off the monthly gross as it should be and as indicated on the monthly check stub. I told you guys... these fucks are scammers and crooks. What are you saying???? That's not the way it works at any company I've worked for, and I've been in 401K for almost 25 years now. |
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No, there is no misunderstanding. If you participate in the 401k, your yearly salary is reduced by the match percentage immediately. This becomes your new annual gross salary. Then the employee contribution election is taken off the monthly gross as it should be and as indicated on the monthly check stub. I told you guys... these fucks are scammers and crooks. I've never seen anything like that before. Do they have any of that in writing? What company is the plan administrator––where is the 401k money deposited? I wouldn't put a dime in the plan until you research the credentials of the plan administrator. |
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No, there is no misunderstanding. If you participate in the 401k, your yearly salary is reduced by the match percentage immediately. This becomes your new annual gross salary. Then the employee contribution election is taken off the monthly gross as it should be and as indicated on the monthly check stub. I told you guys... these fucks are scammers and crooks. Then you wouldn't want to be in a 401-k run by them, right? What are the investment options? Company stock? You are shopping your resume around? |
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Here's how it should work.
If you're not enrolled in the company plan then your pay check is your gross pay minus the health ins premium and taxes. The result is your net pay. If you're enrolled in the plan and have elected 5% to be contributed then 5% of your gross pay is put into your 401(k) account. Then taxes and health ins is taken out based on your adjusted gross pay. If you're close to the gross income bracket borderline you can drop a tax bracket by contributing to the plan to reduce your gross income which puts you in the lower bracket. If the company matches your contribution then the money comes out of the company's account, not any other employees accounts. Many companies have a vesting period. Often it's around 5 years with 20% vested each year. So if you work at the company for 3 years then quit the company can take back 40% of their money they matched (3yrs * 20% = 60% that's yours to keep; 100% - 60% = 40% what the company get returned to them since you aren't fully vested by staying 5 years). If you're not in the plan and the company is taking a percentage of your gross income to contribute to the people who are in the plan it needs to be reported because that's incorrect. 401(k)'s are a great way to reduce your taxes and save for retirement. I contribute the maximum amount to get the match then I max out my Roth IRA account since I have more control over it. The company match is "free money". It's not really free since it's a benefit but they know a certain number of people won't utilize that benefit for one reason or another. There's really no reason why you should not get into the 401(k) plan and start getting free money. |
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No, there is no misunderstanding. If you participate in the 401k, your yearly salary is reduced by the match percentage immediately. This becomes your new annual gross salary. Then the employee contribution election is taken off the monthly gross as it should be and as indicated on the monthly check stub. I told you guys... these fucks are scammers and crooks. So effectively, the company ain't matching shit, you're contributing to your 401k once for them, and once for yourself. That sounds sketchy. |
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If you participate in the 401k, your yearly salary is reduced by the match percentage immediately. This becomes your new annual gross salary. Then the employee contribution election is taken off the monthly gross as it should be and as indicated on the monthly check stub. i still don't think you have this right. your company MUST provide you with documentation of the 401k plan, either in paper form or more likely these days in PDF form. do you have a copy of these documents? ar-jedi |