Negative Cash amount in Alight Solutions 401(k) Account

GDad14

I have a 401(k) account with Alight Solutions that displays a negative number for the cash in the account. There is no cash in the account. I read in the comunity forum about possibly not downloading company contributions, etc. correctly but the conversation ended and didn't get fnal resolution. @Frankx was helping @Casablanca in May 2020. I have the same issue but not sure how you all resolved.

NotACPA

GDad14 said:

@NotACPA no "cash" per se just payroll deduction.

BUT, isn't that a cash transfer to your 401k account?

Unless, perhaps, this is a "Single Mutual Fund" type account ... in which your payroll deductions immediately become purchases without the cash transfer ever being recorded.

BUT, if SMF is the answer, then a "negative cash balance" is oxymoronic as there can be no cash in an SMF.

NotACPA

Are you transferring cash from your paycheck into your 401k account?  Or, in some other way adding cash to the account?

If not, where is the money coming from to purchase the securities in the account?

OR, if there is no cash infusion into the account ... you end up with a negative cash balance.

Frankx

HI @GDad14,

I understand that you are having a problem similar to the one that I helped @Casablanca with - namely that there is "negative cash" in the account.

This was being caused in @Casablanca's case because withholdings from his/her payroll checks were not being posted to the 401(k) plan.  Do you also have this situation?

Let me know.

Frankx

GDad14

@Frankx Yes I think its the same issue based on casablancas screen shot. It's an active account and contributions are taken from my paycheck every two weeks. The employer also adds 1200.00 per year as a incentive/match. I don't add outside cash - just payroll deduction.

GDad14

@NotACPA no "cash" per se just payroll deduction.

NotACPA

GDad14 said:

@NotACPA no "cash" per se just payroll deduction.

BUT, isn't that a cash transfer to your 401k account?

Unless, perhaps, this is a "Single Mutual Fund" type account ... in which your payroll deductions immediately become purchases without the cash transfer ever being recorded.

BUT, if SMF is the answer, then a "negative cash balance" is oxymoronic as there can be no cash in an SMF.

Frankx

Okay @Gdad14,

You just need to research why those payroll deductions are not being posted to the 401(k) account.  How are your payroll transactions being recorded in Quicken right now?  Do you download those entries or do you make manual entries?  To which account()s in Quicken are those withholdings currently being posted?

Frankx

GDad14

@NotACPA - Not cash as far as I understand it. It is a pre-determined amount deducted from paycheck, and then "auto" purchases pre-determined share types at whatever the current price. So shouldn't be any actual "cash" - I would think it hould just show additonlly purchased shares. It's odd…

GDad14

@Frankx I'm not sure exactly how they're supposed to show. I download trying to avoid manual entry. They are showing as Buy transactions. Screen shot attached. That negative 9000.00 balance is coincidentally the amount the overall account is off.

Frankx

@GDad14,

Thanks for the screenshot - it shows the buys that are being made in the 401(k) account.  What you need to look at is a recent payroll entry to see what is actually being recorded in Quicken to account for the 401(k) withholdings that are being taken out of your pay.  Can you tell me which category those are being applied to?

Frankx

GDad14

If I understand your question correctly - there is a flat amount deducted each paycheck. That ammount gets distributed accross three 401(k) account offerings that I've selected and in the percent distribution I selected. 7% for one, 21% and 72% distribution for the other two. My paystub only shows the flat amount of deducted. When I look at the transaction for each of the accounts, it says there are missing purchases, and looks to be in the mount of shares distributed as I noted. So I suppose I coudl do some quick math and do a Guestimate to to get close, but that;s manual and I shouldnt't need to I;d think.

Frankx

@GDad14,

You said " My paystub only shows the flat amount of deducted."  We need to find out where that line item on your pay stub is being posted - within Quicken - because it should be going into the 401(k) account, but it is not going there (which is why you have negative cash in the 401(k).

Just take a look in Quicken at the entry for a recent payroll deposit and that's the account that you need to move those withheld 401(k) contributions from.

Does that make sense?

Frankx

GDad14

@Frankx - Not exactly sure I follow. The 700.00 is the flat amount, applied as "Investment Amount" on the screen shot. It shows how many sares were purchased at the share price, and that all looks correct. The column "Amount" then seems to deduct the purchase amount (700.00) and the next column "Balance" shows the running negative amount that is the issue. In Banking I see th paycheck added correctly, as income, but of course is net the ducuction. I'm close but not there with ya yet….

GDad14

I checked "Contains No Cash Transactions" box in settings and it cleared the Amount and Balance columns out of the screen shot I shared. That seemed to do it. No not showing the Investment Amount with same negative amount in the Amount column and corresponding running tally of negative Balance. I think that check box is a newer feature. Anyway, I think that's it.

Frankx

HI again @GDad14,

Well, that doesn't actually fix the account, because you have no way of knowing what the basis of the account is (basis is what the shares cost over the life of the investment) and you need to know that evaluate the investment.  You also have no "control" over your payroll withholdings - that is, if your employer fails to deposit your withholdings into your 401(k) account, you'll likely never know.  To be fair, they would not likely do that, but mistakes happen, but having the withholdings post to the account would be a control and you'd see it automatically and instantaneously. 

Anyway, if you are good with it, that is all that matters.

Take care.

Frankx

NotACPA

Why is the 8/14 buy for $700 reflected twice?  If you only made one transfer on 8/14, this (going backwards) could be the source of your discrepancy.

GDad14

@NotACPA I have no clue why that's there twice. The two columns in the screen shot showed each Investment seemingly "deducted" as cash in the Amount column and then tallied up over time in the Balance equling the total 9000.00 negative balance that's the original issue.

NotACPA

I think that you need to look into that matter ... as it seems to be the crux of your issue.

volvogirl

We need to know what category the 700 is going to when you enter your paycheck in your checking account.  Are you splitting out all the deductions?  It needs to be a Transfer to the 401K Account with square brackets like [401K].

John_M

I'm coming to this conversation a little late, but I think this may be happening.

If you show cash going into your account (and there's a good reason to do it this way as @Frankx points out) then cash can come from a variety of places:

1. Payroll withholding (your contribution)
2. Employer match
3. Sales of securities
4. Dividends and other types of investment income

3. and 4. ought to take care of themselves when you download transactions, so I won't deal with them here.

1. Payroll withholding should be a split from your paycheck. This would be shown as a transfer to the investment account. When you enter your paycheck, you will see this amount increase your cash balance in the investment account.

2. The employer match has to be entered manually – either as a split line in your paycheck or as a separate transaction. In the Windows version, there is a "Paycheck Wizard" that handles employer match contributions, but this feature does not exist in the Mac version.

The way I do this is to have two additional splits in my paycheck – one for the income (I call it Nontaxable Income:Matching Contribution) and one for the transfer to the investment account. This way the two transactions net out to zero. You will see two transfers into your investment account each paycheck – one from your contribution and one from your employer. If you employer does not make a contribution each paycheck, then you need only to do this when they make a contribution. In this case, a separate transaction, not associated with your paycheck, might be preferable.

The whole goal here is to keep your cash account balance at zero (or to know why it's not). It shouldn't be negative – only zero or positive. If it's positive, then you know that your employer still has not made a contribution to your account. It's a great way of making sure they're not holding money that should be deposited.

Hope this helps.