Avoiding Employment Fraud
Many employees participate in employer-sponsored retirement savings plans such as 401(k) plans. These plans allow you to have a portion of your pre-tax income deducted from your paycheck and invested in a tax-deferred account.
An anti-fraud campaign by the Department of Labor uncovered a small fraction of employers who abused employees’ 401(k) contributions, either by using the money for corporate purposes, or by holding the money for too long. The Department of Labor issued a list of ten warning signs that your retirement savings contributions are being misused.
Ten Warning Signs That Your 401(k) Contributions Are Being Misused
- Your 401(k) or individual account statement is consistently late or comes at irregular intervals.
- Your account balance does not appear to be accurate.
- Your employer failed to transmit your contribution to the plan on a timely basis.
- There is a significant drop in your account balance that cannot be explained by market declines.
- Your 401(k) or individual account statement does not show your contributions.
- The investments listed on your statement are not what you authorized.
- Former employees are having trouble getting their benefits paid on time or in the correct amounts.
- There are unusual transactions, such as a loan to your employer, a corporate officer, or one of the plan trustees.
- There are frequent and unexplained changes in investment managers or consultants.
- Your employer has recently experienced severe financial difficulty.
If you find any of this occurring, contact the Employee Benefits Security Administration at its toll free number, (866) 444-3272.