401k Salary Deferral RULES

[User1234]

Can my employer require:

(1) That I make my salary deferral election at the beginning of the fiscal year

(2)That once I make my selection, I cannot change it unless there is a life event (baby, marriage, hardship, etc)

(3) That once I make my selection, I can only "downgrade" it and NOT "upgrade it"

[StormRichards]

I will bump your thread to help you get a response.

I really don't know what the rules are. I just know my employer allows me to make changes at anytime and I can increase or decrease my election. The only caveat is that there are deadlines for the changes to go into effect for the upcoming pay period. Miss the deadline and the request goes through for the following pay period. That of course sounds perfectly reasonable to me.

But I have never heard of an employer not allowing you to make changes.

Hopefully someone more knowledgeable will see this and offer their insight.

[disneysteve]

I just know my employer allows me to make changes at anytime and I can increase or decrease my election.

I have heard of only being able to make changes at certain times, but I've never heard of not being able to increase your contribution. That's ridiculous if it's true. I would check on that. Get it in writing, not just verbally from some HR person.

[Petunia 100]

Can my employer require:

(1) That I make my salary deferral election at the beginning of the fiscal year

(2)That once I make my selection, I cannot change it unless there is a life event (baby, marriage, hardship, etc)

(3) That once I make my selection, I can only "downgrade" it and NOT "upgrade it"

They can if the plan is written that way. Ask for a copy of your plan documents.

[cornfieldj]

Most plans and recordkeepers allow you to make changes at any time. I've made about 5 changes to my plan this year.. and I didn't start this job till April. One thing to keep in mind is that changes will not take place instantly. Often it's with the next payroll period, or the following month.

Also, it's to a plan's advantage to let you increase how much you contribute. If the more highly compensated employees are contributing to their maximum, but the lower-paid people in a company aren't contributing much, the plan is considered "discriminatory" - and then contributions get returned to the higher-paid people. They don't like that.

And there are some companies that really see it as being to their own advantage if their employees are contributing a lot, and getting prepared to retire successfully.

Perhaps you're thinking of health-related benefits, that you have to elect during a specific period and can only change when there is a change to your family's situation.

[cornfieldj]

Can my employer require:

(1) That I make my salary deferral election at the beginning of the fiscal year

(2)That once I make my selection, I cannot change it unless there is a life event (baby, marriage, hardship, etc)

(3) That once I make my selection, I can only "downgrade" it and NOT "upgrade it"

Really curious about this. Could you link to a PDF of any statement from the company or from your HR department that says this? Use a Sharpie to XXX out your name and the company name, and anything else that is personal.

[greenskeeper]

Can my employer require:

(1) That I make my salary deferral election at the beginning of the fiscal year

(2)That once I make my selection, I cannot change it unless there is a life event (baby, marriage, hardship, etc)

(3) That once I make my selection, I can only "downgrade" it and NOT "upgrade it"

Sounds like you are confusing retirement benefits with open enrollment for health insurance benefits.

I've never heard of a 401k being restricted to certain times of the year, open enrollment yes.

In my younger years I used to change my contribution all the time depending on how much O/T I worked during a pay cycle. Now I have it maxed out so no need to adjust.

[MooseBucks]

Really curious about this. Could you link to a PDF of any statement from the company or from your HR department that says this? Use a Sharpie to XXX out your name and the company name, and anything else that is personal.

I agree - This is the first I've ever heard of anything like this and would like to see it.

[sv2007]

yes, yes, yes.
Talk to you HR/benefits department; you should be able to, at the very least, "upgrade" (increase) at the beginning of next year.