It shouldn’t have to be your responsibility to avoid getting scammed out of your 401(k) plan contributions. Unfortunately, there are selfish, entitled, and desperate people in the world whose dysfunctional moral compass tells them that it’s OK to steal others’ money.
Here’s what to look out for so you can reduce your chances of being fleeced and losing the money that’s key to your ability to retire.
Key Takeaways
- Federal laws and oversight programs try to protect employees from 401(k) scams, but they can’t catch everyone.
- If you participate in your employer’s 401(k) program, you need to be diligent about keeping tabs on your account statements and activity.
- Knowing about common types of 401(k) fraud can help you protect your retirement savings.
Missing Contributions
In fiscal year 2021, the Employee Benefits Security Administration (EBSA) indicted 16 plan officials, corporate officers, and plan service providers in criminal cases related to plans funded in whole or in part by employee contributions withheld from wages. These are just the cases that the government was aware of and acted on. The actual scope of criminal behavior in defined contribution plans, such as 401(k)s and 403(b)s, is almost certainly larger.
Check your pay stubs against your retirement plan activity. Keep an eye out for missing contributions in these categories:
- Amounts withheld from your paycheck
- Employer matching contributions
- Amounts that should have been…
