401K - administrator holds contributions for 7 days before investing them

 Hello --

Paychex administers my employer's 401K plan with Fidelity.

Paychex does not invest my twice-monthly paycheck contribution to the
plan until 7 days after the paycheck date.

That is a long time for my funds to not be invested.  Contributions to
my former plan, administered by ING were invested on the same day the
paycheck was issued.

Is it legal for an administrator to hold funds that long?

I could not think of another group in which to post this question, and
will appreciate any response, or information about other resources or
names of more appropriate groups in which to post..

Thanks in advance for any help.

Larry Mehl

 

They have until the 15th business day of the next *month* following
the payroll deduction, per Department of Labor regulations.

That said, even 7 days is a long time nowadays for this.  Paychex
is absolutely capable of making that investment on your behalf
on the day in which it's taken from your paycheck.


misc.invest.financial-plan


--

 mehlREMOVETHIS@cyvest.com wrote:

I see a three week lag in my contributions to my 401k run by Wachovia. I
don't see a big deal about it.

 

What if you were to find out that during those three weeks, your money
had tripled in value by its use during the time it was out of your
control, but that even so, *you* were getting only what you had put in?
Would you care then?

 Snowbound wrote:

well it's just about impossible for money to "triple" in just three
weeks. The financial markets don't really work like that.