- Nov 7, 2000
- 16,404
- 3
- 81
My situation:
I started a new job back in May. The company requires that you work for 6 months before becoming eligible for the 401K plan (roth 401k if it matters). Thats not great, but whatever. So, fastforward to November. I'm finally eligible to contribute. I am well aware of the benefits of a 401K, so I decide I am going to try and hit the max for the year. Fortunately, my plan allows for contributing up to 96% of your paycheck. I get paid on the 1st and 15th.
Anyways, my issue is with the company match. Per the documentation I received, it is described as:
Per Pay period Employer Match: 100% on employee's first 3% of contributions, plus 50% on the next two percent of employee's contribution (4% total).
On my Safe Harbor notice it is described as:
A Matching Contribution in an amount equal tot he sum of 100% of the portion of your Employee 401k Contributions which do not exceed 3% of your Compensation, plus 50% of your Employee 401k Contributions between 3% and 5% of your compensation.
Essentially, it is a 4% matching plan.
My assumption was if I put 15k into the plan, i would get matched to 4% of my compensation (few thousand dollars). Instead, what I am seeing is that even if I contribute my full paycheck, my match is only 2% of that amount, and not 100% of that amount, up to 3% of my annual salary. I guess I assumed compensation meant my annual compensation, but the guy was talking like it was my per pay period compensation.
Is this the way it is commonly interpreted? The guy I spoke to said this is how all 401Ks work... I guess I just want to make sure I'm not getting hosed here.
Anyone have any knowledge or experience. Sorry if this is too long or doesn't make sense... I *said* I was confused!
I started a new job back in May. The company requires that you work for 6 months before becoming eligible for the 401K plan (roth 401k if it matters). Thats not great, but whatever. So, fastforward to November. I'm finally eligible to contribute. I am well aware of the benefits of a 401K, so I decide I am going to try and hit the max for the year. Fortunately, my plan allows for contributing up to 96% of your paycheck. I get paid on the 1st and 15th.
Anyways, my issue is with the company match. Per the documentation I received, it is described as:
Per Pay period Employer Match: 100% on employee's first 3% of contributions, plus 50% on the next two percent of employee's contribution (4% total).
On my Safe Harbor notice it is described as:
A Matching Contribution in an amount equal tot he sum of 100% of the portion of your Employee 401k Contributions which do not exceed 3% of your Compensation, plus 50% of your Employee 401k Contributions between 3% and 5% of your compensation.
Essentially, it is a 4% matching plan.
My assumption was if I put 15k into the plan, i would get matched to 4% of my compensation (few thousand dollars). Instead, what I am seeing is that even if I contribute my full paycheck, my match is only 2% of that amount, and not 100% of that amount, up to 3% of my annual salary. I guess I assumed compensation meant my annual compensation, but the guy was talking like it was my per pay period compensation.
Is this the way it is commonly interpreted? The guy I spoke to said this is how all 401Ks work... I guess I just want to make sure I'm not getting hosed here.
Anyone have any knowledge or experience. Sorry if this is too long or doesn't make sense... I *said* I was confused!