Is Your (Financial) Relationship on the Rocks?

Filed in DOL, Retirement by on November 12, 2013 2 Comments

Sad woman with piggy bankAt first things are great, you feel supported and you’re optimistic about the future. But then you notice some unusual behavior and you start to wonder: Is this relationship as healthy as it should be? Is it serving your best interests? After everything you’ve put into it, what are you taking away?

Many employees invest part of their paychecks into a retirement plan like a 401(k). Generally, employers withhold some of their earnings and transfer them into an account in the retirement savings plan. While the majority of employers invest that money sensibly and responsibly, abuse does happen.

The Labor Department’s Employee Benefits Security Administration enforces several laws and regulations designed to protect retirement savings, but workers can take some responsibility for their own protection by learning the warning signs of benefits abuse:

  1. Chronic lateness: Your 401(k) or individual account statement is consistently late or comes at irregular intervals.
  2. Trust issues: Your account balance does not appear to be accurate.
  3. Broken promises: Your employer failed to transmit your contribution to the plan on a timely basis – or at all.
  4. Disagreements: Investments listed on your statement are not what you authorized.
  5. Constant changes: Frequent and unexplained changes in investment managers or consultants.

These are just five examples of “red flag” behaviors that could indicate problems with your 401(k) plan. But what should you do if you suspect your 401(k) isn’t working for you?

A good first step is to contact your employer or the plan administrator and request an explanation – or a correction. If you’ve got questions, you can also reach out to one of our benefits advisors at or 1-866-444-3272.

Ultimately, one of the best ways to protect yourself and your financial interests is to stay informed. As part of my agency’s mission to protect the employment savings of America’s employees and retirees, EBSA provides many resources to help people plan for retirement and assess their investment decisions. Check out our full list of 401(k) red flags, as well as general information about retirement plans and a breakdown of 401(k) plan fees. For additional resources and information, visit

Odds are you want the money you earn through your retirement plan to support you for the rest of your life – so make sure it’s a relationship that works for you.

Phyllis C. Borzi is the assistant secretary of labor for employee benefits security.


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Comments (2)

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  1. Molly Smith says:

    In case if I see some abuse, where can I report it or how should I proceed with it?

  2. RMSmithJr.SPHR says:

    As a 401k plan administrator, I find this posting off the mark. The privately held company that I work for is extremely diligent to ensure that:

    1. Account statements are mailed quarterly, are available via email, & are available 24/7 online.

    2. Fund balances are audited annually and have never out of balance.

    3. All employee contributions are promptly posted. In fact our 401k provider posts the employee contributions on pay day with the ACH funds transfer on the next day.

    4. Fund selection disagreements: All fund investments are under the direct control of the employee.

    5. Fund managers are monitored by the 401k provider, investment advisor, and myself. There is no churn.

    The largest problem I see with 401k’s is lack of employee engagement. Fund statements and the plethora are routinely ignored. Fund performance is not monitored or changed when perhaps appropriate.

    To add credibility to this blog posting, please provide current data detailing the trend, scope & magnitude of the alleged, chronic and implied abuses.

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