Unauthorized stoppage of 401K contributions and severance overpayment

I was on a severance plan from my employer. The terms of my severance included continuation of 401K contributions on both my part and my former employer. Due to some sort of "hickup" in the the system of the 3rd party that handles the pay and benefits, my 401K contributions ceased. I called to rectify the situation and they admitted fault and asked me to send a check for my portion of the contribution, which I did. After they received the check that called to inform that they mistakenly overpaid me, subsequently the check that I sent them was over and above what my 401K contribution was going to be. They said that they are going to keep the excess from my check and apply it to the overpayment and for me to send in the rest. I recently checked my 401K balance and found that they did not apply any of my payment to my 401K account. They have not put anything in writing to me about the overpayment to me. If they do not make the appropriate 401K contribution and responding match will I be entitled to remedies. If my W2 reflects the incorrect pay and I pay taxes based on an incorrect W2 will I be entitled to remedies, worst yet will they be entitled to collect the overpayment and leave me to correct my situation with the IRS oon my own nickel. They have not provided to me anything in writing eventhough I requested it. Should I take a wait and see approach to deal with this or is it in my best interest to confront the situation now.

1 answer  |  asked Dec 6, 2004 3:12 PM [EST]  |  applies to Pennsylvania

Answers (1)

Christopher Ezold
You should act now.

Before I respond to your inquiry, I must state that we have not spoken, I have not reviewed the relevant documents and facts, and I do not represent you. Therefore, my discussion below is not a legal opinion, but is informational only. Finally, my discussion applies only to issues to which Pennsylvania or Federal law apply, unless otherwise specified.

That being said, you should act now to preserve any rights you may have. You should address the issues in writing with both ADP and your employer, and such written notice should be sent by a trackable mail service (FedEx, etc.). Taking money that you intend for depositing in your 401(k) account may amount to theft as well as violations of ERISA, the Pennsylvania Wage Payment and Collection Law and banking and securities laws.

If you would like to discuss this matter further, please feel free to contact me at the below address(es) or number.

/Christopher E. Ezold/
Nancy O'Mara Ezold, P.C.
401 City Line Avenue,
Suite 904
Bala Cynwyd, PA 19004
(610) 660-5585
Cezold@Ezoldlaw.com

posted by Christopher Ezold  |  Dec 6, 2004 4:15 PM [EST]

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