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Must You Contribute To A Retirement Fund

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  • 03-28-2008, 02:06 PM
    Danu
    Must You Contribute To A Retirement Fund
    My sister-in-law works at the YWCA and they are demanding that she
    join their "retirement fund". They gave the employees paperwork stating
    that this is not an option, but a requirement. Is that legal?
    At first they hounded her to donate part of her salary ($9.00 per hour)
    to the United Way, not they tell her she must donate 3% of her salary
    to the retirement benefit fund.
    She works all night long cleaning for them working for hardly enough salary
    to pay for her gas to get to work, now they want her to fork over 3% for
    a fund. She barely can make ends meet, now they want to force her to
    give what she doesn't have.
    What recourse does she have?
    She lives in NJ
  • 03-28-2008, 02:07 PM
    cbg
    Re: Must You Contribute?
    Is the retirement fund you refer to a pension plan? A 401k?
  • 03-28-2008, 02:23 PM
    Danu
    Re: Must You Contribute?
    Is there such a number as a 403k? I am not sure exactly what the title is.
  • 03-28-2008, 03:57 PM
    cbg
    Re: Must You Contribute?
    It might be a 403b. What's her employer's industry?
  • 03-28-2008, 05:46 PM
    Danu
    Re: Must You Contribute?
    It is a YMCA.
  • 03-29-2008, 09:37 AM
    cbg
    Re: Must You Contribute?
    Yes, I suppose that could be a 403b.

    I know less about 403b's than I do about 401k's, but I will be talking with someone later today that knows more about them than I do. I'll get back to you.
  • 03-29-2008, 03:41 PM
    Betty3
    Re: Must You Contribute?
    This is what my source says but hold for cbg to come back & see what the person she talks to has to say.

    At one time, the only way you could join your company's 401(k) plan, 403(b) plan, or 457(b) plan was to put pen to paper and sign yourself up by filling out the appropriate forms. Now, though, in an effort to help participants increase their retirement savings, some employers have begun enrolling their employees automatically. With automatic enrollment, you don't fill out a form to opt into your company's retirement plan; you only fill out a form to opt out of it. You need to ask your employer for an opt out form if you do not wish to participate in their retirement plan. They cannot require you to participate though very few employees will opt out.
  • 03-29-2008, 04:41 PM
    Danu
    Re: Must You Contribute?
    They gave her a paper to fill out and on it the phrase "required to join"-
    nothing about legally required, just required to join.
    She must fill out papers and sign it. That is what makes me wonder if she
    does have an option to say no.
    When she began to work there, they were on her back (almost demanding)
    she automatically have a deduction for the United Way be taken out of her
    salary. She works all night scrubbing and cleaning for these people and makes $9.00 per hour and they insist she give part of that away. Now this.
    That is pure nerve.
    If she is legally not required, then she won't. She can barely make ends meet now.
  • 03-30-2008, 08:56 AM
    cbg
    Re: Must You Contribute To A Retirement Fund
    According to my expert, she needs to confirm if it is a 401k or a 403b. If it is a 401k, they definitely cannot require it. They can have an auto-enroll, where she is enrolled unless she takes specific steps to prevent it, but they cannot make it mandatory.

    If it is a 403b, my expert says she does not believe they can make it mandatory, but she is not positive, because while they are mostly the same regs, there are a few differences and she has never run a 403b.

    The US DOL is the regulatory agency for both. That's who she should contact both to confirm whether a 403b can make participation mandatory, and to file her complaint if they say it cannot (or if it turns out to be a 401k, where mandatory is definitely not allowed).
  • 03-30-2008, 11:26 AM
    Danu
    Re: Must You Contribute To A Retirement Fund
    I just thought that perhaps this may make a difference. My sister-in-law
    is in her 60s. Would this change what happens with this 403b plan?
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