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Joseph
Joseph, Lawyer
Category: California Employment Law
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Experience:  Extensive experience representing employees and management
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Is there a legal due date for profit sharing plan disbursements.

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Is there a legal due date for profit sharing plan disbursements. I have filled out and signed all of the necessary paperwork with the administrator. The time frame for disbursements is not documentated and the administrator has not been able to answer my question, other than my ex-employer is not answering their phone calls. Please help. [email protected]
Could you tell me what the nature of the plan is? Is it a deferred plan, cash plan, or a combination plan?

Also, have you ever received contributions from the profit sharing plan in the past, and if so in what time frame?
Customer: replied 3 years ago.

This is a cash plan. I have never received contributions from the profit sharing plan.

Hello Dawn,

Unfortunately, there is no legal requirement (in California statutes or case law) that disbursements from a cash profit sharing plan take place within a certain amount of time. So, since there is no condition in the contract that states when the distributions must take place, the courts would likely substitute a 'reasonable' amount of time.

If it appears that your ex-employer is simply refusing to honor its contractual obligation to you by not providing you with disbursements that should reasonably be available, you can sue your employer for breach of contract for the money that you are due under the profit sharing plan, plus fees and interest. (A reasonable time period would definitely be within a year, at most, after you the documents were signed).

Depending on how much you expect to received from the profit sharing plan you could either sue in small claims court (for amounts under $10,000) or regular civil court for any amount above that.

I would suggest that you send a demand letter or email to your employer first prior to filing suit to try to resolve things prior to filing suit.
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