Can Someone Steal Your 401(k)?

Most people don’t think too much about 401k theft. After all there is plenty of protection from evil doers with multi steps just getting to your 401k account. A thief needs the account number, custodian, passwords or pin numbers, plus all the employer and employee information. Most folks think Forth Knox is safe but their 401k is safer.

People who have 401k plans normally do a quick eye-ball of their statements either paper copy or on-line and check if they’re account balance is up or down and leave it at that. Few really check to see if their monthly contribution was made, if there is a cash difference between one month and the next or if any funds in their allocation have changed. If a statement is late or missing a lot of us wouldn’t even know with everything else happening in our lives. The one thing employees never expect is having someone at their employer or working for their employer or 401k plan stealing from them. This is exactly what happens almost every day.

Steven Zavidow, who owns and operates 11 Burger King restaurants in the New York City area was arrested and charged with stealing over $260,000 from his employees retirement plan in July, 2010. He looted the plan and simply cashed checks at the local check cashing store.

In June of this year two Hewitt Associates who were responsible as customer service representatives transferred money from Hewitt’s 401k client accounts to their personal accounts. Neither thief knew what the other was doing while at the same company. They were stealing independently.

There are other examples but the important thing is that everyone who owns a 401k do some homework to make sure no one is stealing from their account. Here are some red flags and things to do to protect yourself:

• Make sure you get a statement each month or quarter and question if you do not.
• Check to see your contribution for the month was made and what date.
• Has the amount changed due to normal market fluctuation?
• See if your allocation has changed and if you own money markets if that has decreased substantially.
• Has any funds been added to or subtracted from your account.
• Has your employer recently changed the plan administrator or custodian and why?
• Has someone changed your address on your statement.
• Call the 1-800 number to double check your statement.

If you think something fishy is going on with your 401k account and you’re not getting anywhere with your employer go to the Department of Labor that specializes in this sort of theft. The local cops cannot help nor does it do much good to hire a securities attorney to chase your employer. One of the reasons the DOL was formed was to oversee retirement plans. You may visit their web site at www.dol.gov/ebsa.

If you have questions call Paul @ 877 783 7080 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.