I recently talked to the coordinator of my 401K plan, because it seemed like my balance was significantly lower than the amount that had been diverted from my salary. She informed me that all money diverted from my paycheck for a month is not invested for me until the 15th of the following month. So if I got paid on November 4, and $500 was deducted for my 401K, it actually doesn’t get put into mutual funds, or whatever, until December 15. That means a two to six week lag time when my employer has the use of what should be my money! The 401K woman claimed that this is normal, but I’ve never noticed it before. My questions are:
- Is this normal?
- Is it even legal?