Calling lawyers, benefits people -
I’ve been going through an issue with my employer about a problem with my 401k contributions. The short summary is that they “forgot” to do any contributions to my 401k for two years, including 50% matching, and instead the money (minus matching) ended up in my paycheck and I was taxed on it. After six months of going back and forth, they’ve admitted fault and are willing to make a settlement to me in form of a lump sum to my 401k to make the problem go away. One problem I have is knowing what a ‘fair’ settlement would be.
During the time in question, I had set my paycheck withholding high enough that the total amount that would have been in my 401k would have been the maximum legal contribution of $16500, times 2 years or $33000. Add 50% matching @ $8250 * 2 years to total $49500. On top of that is whatever my investments would have gained or lost, of which I have no idea.
On the other side of the ledger: I got that money as regular pay, so in theory I still have it minus taxes. It seems to me I am owed the taxes payed plus all the matching contributions, plus investment gain, if any. But that ‘fair’ amount seems a little fuzzy – even if they stuff that settlement amount into my 401k, tax deferred, I’m still out any investment gain that the remaining money (the taxes) would make over the next 15 years before I would be whole.
How are things like this settled fairly? What should I be owed? I can’t be the first person this has happened to, so there must be some sort of standard procedure, if only because 401k’s are highly regulated. Are there online resources that detail existing cases and how they were settled?