Post-Severance 401K Contribution not done by employer

[startedwithasmile]

I was part of a RIF and I was assuming my post-termination Bonus payment would have 401K contribution taken out however it did not. My understanding is a Bonus payment would quality as "Earned income" as it was due regardless of my employment status. I'm not sure about the Severance payment which was also due but the Bonus was getting paid regardless. I can't access the Plan Rules on 401K site anymore and curious if my assumption is correct, and can my previous employer chose to not do it?

[Cynthiad66]

Your Bonus and Paycheck are two separate pay entities.  Your Bonus is contingent on your employer and 401K institution's agreement or plan.  Usually, if allowed by your plan, you can elect to have a portion of your Bonus contributed to your 401k plan.

Typically, if your employer allows you to contribute bonuses into 401(k), the 401(k) plan may be set to deduct a percentage from your bonus at the same rate as your paycheck.  It is what is normal for your employer and any elections you make.

You can get this information from your plan advisor or Human Resources.

Please come back to the forum if you have additional information or need further assistance.