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Woman drains ex’s retirement account

By Barbara Whelehan ·
Friday, December 7, 2012
Posted: 5 pm ET

Divorce is a tough experience, but such hardship doesn't cut you any slack if you don't stay on top of your retirement paperwork, as one poor fellow discovered.

Imagine this scenario: After 11 years of marriage, you and your spouse call it quits and you move out of the house. After you leave, a letter from your former employer is delivered to the house that your ex now resides in. The envelope is clearly marked: "To be opened by addressee only." Your ex opens it and discovers there's a new procedure in place to access your retirement funds online. After following the procedures, your ex drains the account in four months.

This happened to William Foster of Tulsa, Okla. He lost $42,126.38 altogether -- and didn't even find out about it until January of the following year, when he received a tax form from the plan provider reporting a distribution of that amount. Foster sent a letter to his former employer's plan administrator, "claiming potential fraud, as I did not request withdrawal from my plan and I did not authorize any disbursement from this plan," according to court documents.

The 10th U.S. Circuit Court of Appeals concurred with a district court's ruling that the plan was not at fault because it doesn't have to insure against wrongful actions by third parties, according to The court found that the plan isn't under any obligation to pay the benefits twice "because of William Foster's failure to comply with his obligations to ensure the plan had his correct address," according to the report.

Foster neglected to notify his former employer, where he hadn't worked for the previous six years, of his change of address. And now he's out 42 grand.

From the PlanSponsor article by Rebecca Moore:

The court found that the employer and plan did nothing wrong. The decision to process account withdrawals was based on receipt of a procedurally sound request. According to the court's opinion, Foster was fully informed of how the plan would allow him access to his money, and that someone with the correct User ID and PIN would be treated as the legal participant for purposes of processing withdrawals.

Foster failed to notify the plan of his new address until 15 months following his split from his wife. In the meantime, the plan mailed a document to the Foster home describing changes in how participants would access their accounts. It included an explanation of how a User ID created by the participant would replace the Social Security number for identification purposes. Foster's ex-wife received the document and made an online request to put in place a new User ID, which the plan confirmed in April 2005. The following month, she changed the account password, changed the listed permanent address to a post office box and withdrew $4,000 from the account. During the next several months, she drained the account.

Anyone is capable of this type of oversight. Let's learn from this poor guy's mistake and stay on top of our retirement planning paperwork, no matter what may be going on in our lives.

What do you think? Should the court have ruled differently? Should the plan provider cough up his money?


Follow me on Twitter: BWhelehan.

Correction: A previous version of this post identified the plaintiff as Michael Foster. His name is actually William Foster.

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Charles Lee
January 09, 2013 at 10:26 pm

Also, she wired the money straight away to her Aunt to put the money on title on a property in another state. Outright fraudulent transfer. Still no one cared.

Charles Lee
January 09, 2013 at 10:18 pm

I live in Georgia and when I left the marital home and asked my ex for a divorce, she forged a pension distribution and emptied the account for $60,000. The form was even faxed from her work and I had already flagged the account before this in case something happened. The bank refused to do anything even after they admitted she had forged the document. They even had noted in the system that the account was flagged about any pension distribution by me, but could not find my faxed request to monitor the account. The D.A would not even address it or peruse and the police called it a "civil matter" I was fired from my job for perusing the issue... because guess what? I worked for the same bank!!! So I lost my job wife stole the savings, she gave the lawyer almost all of it, and she let the house I left her in go to foreclosure. I lost everything and everyone let her do it. I didn't even have money for an attorney for the divorce.

joseph b kubecka
January 09, 2013 at 9:11 pm

was retirement account listed when divorce was filled during discovery. If not were there any children from this marriage?
If so there may be no way for him to chalenge her from doing what she did. {I'snt love grand

Andrew Regan
January 09, 2013 at 8:12 pm

What happened to her? Did they press charges, is she in jail awaiting charges?

Marilyn McClain
January 09, 2013 at 8:03 pm

She committed three federal offenses.

1. She opened mail that was not addressed to her.

2. She then used information from that letter to steal his identity.

3. Once she did that, she was able to committe wire fraud steal.

To make matters worse she systematically drained his account.

All of this adds up to premeditation.

January 09, 2013 at 8:00 pm

She needs to be prosecuted for fraud! No question about it. She stole his identity to access the account and steal the money.

Lee Reynolds
January 09, 2013 at 7:40 pm

What happened to his ex?

Is she in prison for grand theft?

She should be.

January 09, 2013 at 6:56 pm

Sue her!!
Then again let it go, she probably a worthless slime bag
Move on

brenda Meadows
January 09, 2013 at 6:54 pm

I totally agree with Marion White. What she said was what I would have said. No use duplicating all.

Bottom line she opened mail not addressed to her, and said to Adressee only . It was a criminal act on her part to open it.

January 09, 2013 at 6:53 pm

probably won't help much to sue her; presumably she doesn't have much money.