Retirement plan in which the company's match isn't deposited for a year- is this even legal?

[Beaverhausen]

My husband's company is finally offering a retirement plan. They will match at 50% his (up to) 6%, but they don't put their share into the account for a year. This sounds bogus to me. Has anyone heard of this before?

[Benton D Struckcheon]

1. There isn't any regulation I know of on this.

401k's were originally an offshoot of a tax quirk in the IRS code that someone discovered and exploited. Companies can pretty much do anything they want with them. This sounds bogus, but I doubt there's anything you can do about it. They don't have to offer a match at all.
Some consultant doubtless told them it would encourage retention as you have to stay till the next year to get your match. I'm sure that's what's behind it.

[1KansasDem]

2. 1 Year

Do you mean 1 year until the company contribution is vested?

[Angry Dragon]

3. For the year 2013 they will not put any money in until 2014

[Beaverhausen]

9. Right. That's what the document says

My husband has worked for them over 20 years. He is fully vested.

[socialindependocrat]

4. My friend's company does that.

They put in their share at the end of the year. That way if you leave the company they
save some money.

Just another little edge they get you with to save money.

My friend has been with this company for quite a few years.
If I was applying for a new job I'd consider whether I wanted to
work for a company that pulled this kind of cheap shit!

Just shows they'll do more of the same in the future.

[Teamster Jeff]

5. If he is terminated or quits within that year they get to keep their money

instead of contributing every pay period. Bullshit but I'm sure it is legal.

[dixiegrrrrl]

6. So they steal a year's worth of interest from you.

Which may or may not be of any value depending on what interest the account is getting.

[Indykatie]

7. They Can Make No Match or Make It at The Time They Choose

My company makes matches monthly to the retiree plan and to our 401K but I have heard of companies doing it quarterly. Doing it once a year is unusual but not illegal.

[Nye Bevan]

8. Since it is fully legal to have no company match at all,

waiting until the end of the year to do a company match is completely legal.

[Ruby the Liberal]

10. That isn't surprising at all. Another thing to check

he may have to be employed on the day of the match. So, if 2013 matches aren't credited until Jan 15, 2014 - anyone not still employed on Jan 15, 2014 doesn't get a dime.

[DavidDvorkin]

11. It's called "vesting"

And it's common.