I read on http://www.doughroller.net/retirement-planning/happens-contribute-401k/:

Most of us won’t have to worry about contributing more than the annual limit. Even if you have enough money available to over-contribute to a 401(k), your plan administrator will likely keep you from contributing too much in one year.

The likely implies that some plan administrators do not check for 401(k) overcontributions (e.g., over 18kUSD in 2017, excluding the employer matching). Does Vanguard ensure that employees do not overcontribute to their Vanguard 401(k) accounts?

  • 1
    I learned the hard way that not all software catches it. I worked for a small business, and while their software limited a single 401(k), it didn't seem to handle the max spread across a Traditional and Roth. Commented Sep 4, 2017 at 1:00

2 Answers 2


I don't know if the tracking is done by the payroll department or the 401k trustee, but my experience has been that the only thing they can't account for is multiple jobs.

Having two jobs simultaneously or two jobs during the year means that they can't know when you are hitting the annual limit.

How the hitting of the limit impacts company contributions, and if they allow a switch to post-tax contributions depends on the plan rules. Note: post-tax doesn't equal Roth.

  • 1
    As someone who has over contributed in the past because of a job change, I'd also like to point that it isn't a big deal if you over contribute and it is easy to remedy.
    – minou
    Commented Sep 1, 2017 at 11:52
  • As long as you catch it before April 15 the next year, it is penalty-free. Commented Sep 4, 2017 at 0:59
  • I have overcontributed because of a mid-year job change. Both accounts are with Vanguard. I wish they would have prevented it, but they did not.
    – SimplGy
    Commented Feb 23, 2019 at 20:14

The answer depends on who the plan administrator of the 401(k) plan is:

  • Vanguard wearing its "workplace plans administrator" hat in which case Vanguard will indeed monitor the monthly contributions and notify your employer's payroll department if you hit the maximum limit before year end,


  • some other plan administration company which allows investments in Vanguard funds as part of its package deal in which case Vanguard itself might well be completely unaware that you have invested with them; the plan administrator company might well take all the money that employees have chosen to invest in VFINX (say) and invest the sum total in VFINX in a single account in the plan administrator's name. The plan administrator keeps track of how many shares of VFINX belong to which employee, and the only way for you to operate the 401(k) account (e.g. to take a loan from the 401(k) plan or to request a distribution etc) is through the plan administrator's web site. You cannot log into Vanguard and see an account with your name on it, not in the personal investors area nor in the workplace plans area. In this case, it is the plan administration company's job to keep track of how much you have contributed and let your employer's payroll department know.

As mhoran_psprep's answer points out, employer payroll departments are themselves quite proactive in keeping track of employee contributions to 401(k) plans and stopping sending contributions when the limit has been reached. For highly compensated employees (HCEs), there are stringent limits on how much HCEs can contribute based on the actual contributions by more lowly-paid employees: if the "Indians" don't contribute enough, the "Chiefs" can't either.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .