September 2011

From employer shenanigans, that is, not market fluctuation

Millions of Americans correctly stash retirement savings in a 401(k) or other employer-sponsored retirement plan. The overwhelming majority of those accounts operate soundly, but there have been exceptions. An anti-fraud campaign by the Department of Labor found that a small number of employers abused employee contributions by either using the money for corporate purposes or holding on to the money too long.

Here are 10 warning signs from the Department of Labor that your pension contributions are being misused:

1. Your 401(k) or individual account statement is consistently late or comes at irregular intervals.

2. Your account balance does not appear to be accurate.

3. Your employer failed to transmit your contribution to the plan on a timely basis.

4. Your account balance suffered a significant drop in value that cannot be explained by normal market ups and downs.

5. The account statement does not show that your paycheck contribution was made.

6. Investments listed on your statement are not what you authorized.

7. Former employees are having trouble getting their benefits paid on time or in the correct amounts.

8. Unusual transactions appear, such as a loan to the employer, a corporate officer or one of the plan trustees.

9. There are frequent and unexplained changes in investment managers or consultants.

10. Your employer has recently experienced severe financial difficulty.

If you've noticed any of these signs, there may be something wrong. Immediately contact the Department of Labor's Employee Benefits Security Administration at 866-444- 3272 or www.askebsa.dol.gov.