Employees need to keep eye on 401(k), retirement plans
Employees with any benefits plans provided by employers should make sure they are receiving timely quarterly statements, verify that the amounts are correct and ask questions if anything seems amiss, warns Rhonda Burke, deputy director for public affairs for the U.S. Department of Labor.
For years, Mary Lou Pochowicz of Wheaton didn't pay much attention to her 401(k) account at work. When the 66-year-old woman did, it led to a lawsuit filed Wednesday in federal court in Chicago claiming Pochowicz's 401(k) contributions made as an employee of Denson Shops in Wheaton weren't deposited in the proper retirement funds. Denson Shops reportedly has restored some of the money, but the case is under investigation by a security agency within the U.S. Department of Labor.
"Just as you would keep track of money that you put in a bank or other financial institution, it is in your best interest to keep track of your retirement benefits," warns the website of the Employee Benefits Security Administration (EBSA).
Last year, the EBSA closed 275 criminal investigations and worked on cases that led to the indictments of 61 retirement plan officials, corporate officers and service-providers. The agency also recovered $696.3 million and paid it back to retirement plans, participants and beneficiaries. In the last two decades, the agency handled 233 cases in Illinois and 113 in the suburbs.
Last month, a federal judge ordered Reginaldo Sulit and retired Dr. Dalisay Sulit to pay back more than $1.6 million they took from a profit-sharing fund set up for nurses and physical therapists at the family-owned Alliance Home Healthcare, a south suburban Palos Heights-based home-nursing business.
Warning signs, Burke says, include an account balance that appears inaccurate or does not reflect contributions from your paycheck, or investments that are different from what you authorized. Other potential signs of trouble include statements from 401(k) accounts that are always late or come at irregular intervals, unusual transactions and former employees having difficulty getting their benefits paid, the labor department reports.
The allegations made against Denson Shops fall under the Employee Retirement Income Security Act of 1974, commonly called ERISA. Federal authorities have the power to file civil suits and levy criminal charges if provisions of the act aren't met.
The EBSA's authority extends to nearly 681,000 retirement plans, 2.3 million health plans, and a similar number of other welfare benefit plans, such as those providing life or disability insurance. These plans cover about 143 million workers and their dependents and include assets of over $8.7 trillion.
For more on how to protect your nest egg, visit the Department of Labor's "10 Warning Signs That Your 401(k) Contributions Are Being Misused" at dol.gov/ebsa/Publications/10warningsigns.html.