Mom’s employer was supposed to be providing a 401k match per her contract but haven’t – for 10 years. What should she expect/ask for as an outcome?

Read the Story

Show Top Comments

Get an attorney versed in this area of law. Even a 30 min consultation on what to do next will likely be the best bet. At bare minimum they will need to pay in the missing contributions, but depending on the laws in this area you probably have a good case for pursuing damages. Even a letter from a lawyer stating as such might be enough to cut a deal with them to avoid court costs.


Payroll basis match is by the end of the quarter following the quarter that the respective employee contributions were withheld. Annual basis match is due by the end of the plan year following the plan year that the respective employee contributions were withheld. If they actually deposited the match the entire time but did something like put it in the wrong account, then it’s a transfer back to her account along with the associated gains. If they never deposited it, then they owe lost earnings based on the due dates of all the aggregrate match for each quarter/year based on the above deadlines, using an IRS/DOL accepted correction method.


Fair and reasonable would be all the contributions she missed plus the growth she would have had, IMO something like at least 6% a year compounded. That company may also want to look into all the work performed by the HR department from back then—occurs to me someone may have been embezzling funds from that employer. Those contributions that were supposed to be going to your mom (and how many other employees) went exactly where? As to you mom, it may very well be worthwhile being represented by an employment and benefits specialist attorney to hold the employer accountable. But first, she can see what they are doing on their own to correct this error. Best of luck on the outcome. Some here may appreciate an update on any new developments.


You may want to also speak w/ a lawyer ahead of time. You’re definitely owed more than what you think due to the compounding of earnings and growth of the funds she selected. If you know what funds she used for those 10 years you can run a back analysis with tools like porfolio visualizer or many others and input how much she would have started with and her deposits over time. This should give you a nice graph of exactly what that growth would have looked like. Let’s be clear: this is not something to be wishy washy about and don’t accept any wishy washy answers that they can’t do anything about it. You can precisely calculate what you would have deposited and how much it would earned. So you are entitled that at the very least. Maybe some more for pointing out that they are idiots and doing their job for them. Speak w/ lawyer. Let them know you are speaking w/ lawyer. Get $$$.


I’d consult a lawyer. They should be reimbursing her for: – The ~$24,000 that they owed her with the match. – The lost investment returns. Could probably just come up with a fixed percentage based on how her 401k has done annually (ie. 7% annually, give or take) – The cost of the lost tax deferral. She now has to invest this in a taxable account, rather than an tax deferred account, so will therefore could be double taxed (cap gains and income tax) on any gains. I’d estimate she is owed in the $35000-40000 range at a minimum. Edit: I misinterpreted $40k owed as $40k salary. Actual number is more like $70k or so. The concept is the same so I’ll leave it.