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Encore
A blog about living in and planning for retirement

Help! My Boss Stole My 401(k)

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Over on community weblog Metafilter, a contributor asked the community for help with a problem: His 401(k) at an ex-employer was liquidated and appears to have been spent by the employer. The full thread is here and – full disclaimer – as un-verified as an anonymous thread on an internet message board can be. Still, this may be every retirement saver’s worst nightmare.

Fortunately, it’s rare. In 2010, 332 plans were reported “abandoned,” which means that there is no longer a plan sponsor or administrator running the plan, according to data from the Department of Labor’s “Abandoned Plans” project; abandoned plans are rarely the result of theft or fraud (as seems to be the case facing the Metafilter commentator); they’re more often due to bankruptcy. That’s truly tiny, considering there are more than half a million 401(k) plans in operation, according to the department. For people who suspect their plan has been abandoned or someone has tampered with their fund, the Department of Labor offers this resource http://www.dol.gov/ebsa/faqs/faq-abplanreg.html.  You can also call them at 1.866.444.EBSA.

For everyone else, it’s a good reminder to roll over old 401(k) accounts. Yes, there are some reasons a saver might want to leave a balance with a former employer, but rolling an old balance into a brokerage account will give you better transparency, as well as protection from the Securities Investor Protection Corporation should anything go awry.

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About Encore

  • Encore examines the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities and priorities of today’s retirees. The blog also explores news that affects retirement, from the Wall Street Journal Digital Network and around the web. Lead bloggers are reporter Catey Hill and senior editor Jeremy Olshan. Other contributors include The Wall Street Journal’s retirement columnists Glenn Ruffenach and Anne Tergesen; the Director for the Center for Retirement Research at Boston College, Alicia Munnell; and the Director of Research for Pinnacle Advisory Group, Michael Kitces, CFP.