My employer notified me that they made an error in the 401k matches that was discovered by an auditor, and that as a result, they will be taking pretty much all the employer matches for this and parts of last year out of my 401k account.
The way they explained this to me was like this: I am one of the few employees that front load their 401k account in the beginning of the year (I typically max out by March or so), and that’s always been fine (I’ve been with the company for years). They have always continued to “match” until the end of the year. So I just get some $300 per pay period in my 401k after I’ve maxed out.
However, when they switched from Voya to Fidelity some year and a half ago, they continued doing that — i.e. they continued the employer matches throughout the rest of the year even when my contributions were already maxed out. Now they are telling me that according to the terms of the Fidelity contract or something they were not allowed to do that and that they have to take the money back. And that there is nothing I can do about or they could do about.
Effectively, or at least that’s how I understand it, after they’ve taken their erroneous contributions back it will be like I didn’t contribute at all for 9/12 months of the year.
This may sound shady but I trust my employer, so I think it was an honest mistake on their part. That doesn’t make me any happier about it though.
I’ve so far only spoken to the payroll person and not to anyone else. Do you guys have any suggestions on how to proceed or what to do? Do I just have to suck it up, or is there any way I can keep the money?
