When contributions to a 401k are witheld from my paycheck, how long until the monies are actually invested?

Question

When contributions to a 401k are witheld from my paycheck, how long until the monies are actually invested?

Answer 1

That depends on how large, conscientious, organized, financially sound, and moral your company is.

I work for a very large company. They have everything automated. And they have good cash flow. My 401(k) payroll deduction hits my 401(k) account on payday.

I also once worked for a very small, disorganized company with little regard for its employees. They always made payroll, but I always wondered if it was the last time they would be able to make payroll. They did everything financial by hand. They really stretched the letter of the law, and they took the full 30 days that they were legally allowed to get our money to our 401(k) accounts.

Answer 2

It depends on when the administrator actually receives the funds. It is very difficult to time these investments and is mostly under the discretion of the companies involved in the transaction.

Answer 3

rule is 15 days following end of month in which money was withheld is the very latest.  However, the DOL has said that no more than 5 days after payroll is acceptable time period.  After that period a company would have to justify the delay if the plan were ever audited.