Financial Literacy - Securing retirement
10 ways to spot 401(k) abuse

2. The numbers don't add up

Check your paystubs, add up your contributions to date and make sure your 401(k) account is off by no more than one or two pay periods. With many 401(k) plans today, especially the larger ones, you can access your account via the Internet and monitor the date of your last contribution, including the amount. If you're still not satisfied with how the numbers add up, alert someone in your company.

"Start with your employer's representative," says Bill Howell, Certified Financial Planner, Certified Public Accountant and head of Howell Financial Advisors in Noblesville, Ind. "They (plan participants) should first be proactive with the employer; then the plan provider (such as Fidelity or Vanguard) and if you're still not satisfied, you should file a complaint with the Department of Labor."

Tip: The Department of Labor, or DOL, says workers with questions or concerns about their 401(k) plans should call 1-866-444-3272. The agency has employees available to answer questions and follow up on complaints.

3. My contribution is always late

"If you're paid twice a month and you're not seeing a fractional amount go into your account at least monthly, that's obviously a sign there may be mismanagement issues," says John Hotz, attorney and deputy director of the Pension Rights Center in Washington, D.C.

Employers of all sizes generally have no more than 15 business days after the end of the month in which they withhold your 401(k) contribution to deposit it into your plan's account. However, the DOL is proposing a new safe harbor rule. It would require plans with fewer than 100 participants to deposit employee 401(k) contributions within seven business days of receipt or withholding. While for now, the proposed rule applies only to small plans, the Department of Labor is studying the merits of applying it to larger plans.

"When employee and employer contributions don't get into the plan in a timely fashion, they become issues that are right in the bull's eye of the kind of enforcement work that the DOL is doing," Hotz says.

Tip: The Employee Benefits Security Administration advises consumers who have information that plan assets are being mismanaged or misused to contact your local EBSA office.


4. Where did all my money go?

Market forces determine the performance of your 401(k) plan, so it's normal to see your balance rise and fall over time depending on fund performance and economic conditions. Still, it's important that you check your benefit statements to make sure the amounts make sense from one period to another.

"Issues of market performance are more subtle, technical and difficult for the average consumer to point to and see that something is wrong," Hotz says. It's possible that if your company is on shaky financial ground, your 401(k) contribution may have been diverted for loans or other reasons.

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