Reading Participant Statements

For my first post regarding participant issues, I want to let participants know what items I review when I look at my own 401(k) statement.  First, grab your new statement and last statement.  For me, I have the June 2012 and March 2012 quarterly statements.   First, I compare the beginning balance on the new statement to match the ending balance on the prior statement.  Grand totals, per source (for example, 401(k) and match), and per investment fund should all balance.  If they do not and the numbers are substantial, note the differences.

Next, grab your paystubs for the time period associated with your statement.  For me, that was three monthly stubs (April, May and June).  Add up employee contributions withheld. This could be 401(k) and/or Roth contributions depending on what you elected when you enrolled for the plan.  More rarely, different names might be used such as catch-up, pre-tax, after-tax, voluntary.  If you are not sure what should have been withheld, also grab your last enrollment form and confirm that the right dollar amount or percent was being withheld from your paycheck.

Now, I check the employee contributions shown as deposited on the statement against what was withheld from my paychecks during this time frame.  If the dollar amounts do not tie, please note the difference.  In my case, the checks were all deposited before the end of the quarter.  You may have had the last deposited after the end of the statement period.  In that case, deduct your last paystub's employee contributions (for me that would be June 2012) and see if it balances.  You may also need to add in the last amount withheld from the last statement period (for me that would have been March 2012) in the event it was withheld but not deposited before the last statement was cut.  If you still cannot reconcile, note the differences.
Example:
401(k) withheld for March = $10, April = $ 20, May = $20, June = $20
401(k) deposits shown on second quarter statement are $50.
401(k) withheld for second quarter was $60.
$60 does not equal $50.
Difference most likely is due to deposit timing.
Deduct June and add March for new withheld 401(k) total of $50.
Withheld 401(k) now balances to 401(k) deposited.

Finally, I check the employer contribution.  In my case, the employer made a 4% safe harbor match contribution.   I check the calculation to make sure it is correct.
There are numerous match contribution formulas, but in this case, it is 100% of deferrals up to 4% of compensation.
Example:  $20,000 * .04 = $800
Amount of employee contributions was $600 so the match will only be $600.
Amount of employee contributions was $1000 so the match will only be $800.

Any differences you discovered should be reported and discussed with your plan administrator.  There may be adjustments or other reasons for any differences, but if they are not noted on the statement, you will need to ask.  In my case, I have a phone number written on the statement to call if I find discrepancies.  If you do not have that information, you will want to ask who you should follow up with at your employer.

Thanks for reading and have a wonderful day!  Please be sure to subscribe to my blog and follow me on twitter @ChristineGurney.