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401(k) auditors

MKDMKD
edited September 2010 in Stupid Questions
Our 401(k) plan is going through the annual audit. Our last payroll of 2009 was paid on 12/31/09. We uploaded the file to our 401(k) TPA's website on 12/30/09, the same day we processed the payroll. Now they want to write us up because the W-2s don't match what the TPA shows as plan deferrals for the year because it always takes the TPA a few days to post the contributions to the employees' accounts. Therefore, next year we should not run any payrolls the last week of December in case the TPA can't get them posted in the same year. What??? :shock:

Comments

  • Ohhh man. Sounds like it is an issue with the 401k TPA, not you. Even if it takes them a couple days to post the file, shouldn't they post it with the date you submit it, so it goes in the right year?!
  • Or, perhaps, the auditors are looking at the dates the cash was received and not the date the deferrals are "as of".
  • Oh - David,
    I think we are talking about two different things -
    If I understand correctly, you are talking about cleaning up discrepancies between the employer and the TPA as to which year benefit contributions are to be credited.

    I was asking if the auditors were looking at the date the TPA received the cash rather than the year to which the contribution was attributed. Seems as though if it was deducted from employee pay in 2009 for 2009, it goes into the employee's account for 2009 and onto the W-2 for 2009 even if the TPA did not receive it from the employer until 2010.

    If the TPA put it into the wrong year, that is a different matter. And you are correct - that should have been reconciled and/corrected before issuing the W-2 Forms.
  • I have posted my question at BenefitsLink, and the answer over there is basically that the TPA should be able to post the records into the prior year, even if they received the cash in the subsequent year. Thanks for your replies.
  • That's what I said! :p Yeah, you need to talk to your TPA and get it straightened out.

    Makes me glad our last check is pretty much always 12/23 or 12/24 though.
  • I know I am late to the party...but yes, this is a 401k recordkeeper issue. They should have known a year end deferral was coming and posted it before the end of the year. Unfortunately with daily recordkeeping now, it is not as easy to "date" the deferral anything other than the date it was posted to the system. But then, they should have considered that in their calendar and had someone there to post the last deferrals of the year on the correct date.

    There were many years while working for a major 401k recordkeeper where I worked that last week of the year to do exactly what I posted above.
  • rrupert wrote:
    I know I am late to the party...but yes, this is a 401k recordkeeper issue. They should have known a year end deferral was coming and posted it before the end of the year. Unfortunately with daily recordkeeping now, it is not as easy to "date" the deferral anything other than the date it was posted to the system. But then, they should have considered that in their calendar and had someone there to post the last deferrals of the year on the correct date.

    There were many years while working for a major 401k recordkeeper where I worked that last week of the year to do exactly what I posted above.


    I agree that this is a recordkeeper issue

    The OP said her file was uploaded on 12/30. When did the cash hit the TPA?

    If its not received by year end, isn't a pending contribution called a receivable ?

    It still should be on the W2's.
  • The TPA is responsible for initiating the ACH withdrawal from our account, and they did so on January 5. I think this suggestion from our auditors is going to go in the "ignore" column.
  • Therefore, next year we should not run any payrolls the last week of December in case the TPA can't get them posted in the same year.

    The TPA is responsible for initiating the ACH withdrawal from our account, and they did so on January 5. I think this suggestion from our auditors is going to go in the "ignore" column.
    I don't know that I would ignore the suggestion - I think I would ask the auditors where to book the DOL penalty for failing to pay the employees timely - perhaps a special account titled "Non deductible cost of stupid things our auditors told us to do"
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