Can I go beyond my 15% contribution cap when I start contributing to 401k in fourth quarter?
My employer tells me that they will match 25% of my contributions up to 8%. I guess that means 8% of my gross salary is eligible for a 25% match.
I'm starting contributions from Oct 1 and they have a 15% cap. They are saying they want to cap my contributions at 15% of my paychecks, which will mean I'll contribute far less this year in total than 8% of my annual salary.
Am I allowed to say, hey, I really want to contribute more than 15% in Q4 to get closer to 8% of the total allowed for the maximum match.
Am I also allowed to say, hey I really want to contribute more than 15% in Q4 to get closer to the .5k max allowed by the IRS?
Edit added: I have been with this company for more than a year, I have only become eligible for 401k in Q4 2014 (hire date was sep 2013, became eligible after 1st anniversary).
Edit added: They've actually now come back and told me I can contribute more than 15% for the last three paychecks this year, which I think is great by them since it helps get towards the IRS .5k max. Still not totally clear how this affects my employer match (which is apparently calculated based on the total contributions in the quarter).
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I think you won't be able to get any additional match at this point. You can request that HR up the percentage that you are allowed to contribute. Whether this can change will be up to the company you work for and the 401k servicing company they provide. The IRS allows you to contribute more than 15% of your paycheck, but your company has the right to limit the contribution amount to 15% of your paycheck.
Also, you say that "I'll contribute far less this year in total than 8% of my annual salary." implying that because you start 10/1 you'll not be able to get as much match.
If you make 0k/year and start 10/1 you should earn k from the company. The company is matching 8% of the full k that you earned from the company that year. They are fully allowing you the match they promised.
On a more general note, company 401k matches are typically done on a per paycheck basis. If you get a match on 8% of your contributions, you can't contribute 0% one paycheck and 16% the next paycheck to get the match. Because of this, you can end up in a situation where you miss out on the company match by contributing 00 per paycheck and hitting the annual max in contributions without getting the full match.
There is no government or IRS restriction on the % of salary allowed, only the .5k max for 2014.
The 15% cap is either a plan imposed or company imposed policy, most likely to prevent people from top loading their 401k in the first month or two of the year.
They really should relax it towards the end of the year to allow people to hit the .5k IRS max, but you would have to speak with your company HR department about it. I personally feel that these artificial company imposed policies are unfair to those employees making lower salaries than those at the top, perhaps you could approach that angle with your HR dept.
EDIT:
I just realized (by re-reading your question) that you are attempting to do this so that you get more of the match money from your company. This won't work, the company is only going to match up to 8% of your salary for the time you are earning paychecks. Even if you contribute the full .5k.
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