401khelpcenter.com Logo

Warning Signs That Something Could Be Wrong With Your 401k Plan

As much as you would like to think all is well with your company, its owners, products, and 401k plan, this is not always the case. It is not that uncommon for things to go wrong. When it comes to your retirement, you don't want anything to happen to your 401k plan. It is up to you to watch out for your own interests.

Here are some of the warning signs that there may be problems with your plan. Individually, no one of these signs should alarm you, but they should cause you to seek out more information. If three or more of these signs appear, take immediate action.

  • You have not received a SPD (Summary Plan Description) in over a year, or never. Your company is required to provide you with a SPD. It explains how your plan works, what its options are, who the administrator and trustees are, and more. It is a very important document.
  • You have never received a statement showing your account balance and how your assets are invested.
  • When you get a statement, it's for a time period more than six months back.
  • Former employees are having trouble getting their benefits paid on time or in the correct amounts.
  • The contributions shown on your statement don't match the deductions shown on your pay stubs for the same period of time.
  • Your employer failed to transmit your contribution to the plan on a timely basis.
  • 401k or individual account statement shows your contribution from your paycheck was not made.
  • Every statement you get has corrections or adjustments.
  • You never get information on the investment options in your plan even when you request it.
  • Your money has been moved to new investment options without your instructions or knowledge.
  • You see a large drop in your account balance when the market has been flat or going up.
  • The trustees has been changed from an institution (like a bank) to one or more key employees within your company.
  • Unusual transactions, such as a loan to the employer, a corporate officer, or one of the plan trustees.
  • Frequent and unexplained changes in investment managers or consultants.
  • Your company is having financial troubles and one or more of the above signs are present.
  • Your company is having financial troubles and your 401k plan holds a large amount of company stock.

What do you do if think you have cause for concern? Click here to find out.

This is for educational purposes only. The information provided here is intended to help you understand the general issue and does not constitute any tax, investment or legal advice. Consult your financial, tax or legal advisor regarding your own unique situation and your company's benefits representative for rules specific to your plan.

About | Glossary | Privacy Policy | Terms of Use | Contact Us

Creative Commons License
This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.