Aug 25, 2009 3:00 pm US/Eastern
3 On Your Side: Orphaned Pensions And 401k's
PHILADELPHIA (CBS 3) ―
-
-
You work hard and squirrel away as much cash as you can for retirement. So, imagine trying to access your 401k or pension money only to find out it's there, but you can't touch it!
CBS
You work hard and squirrel away as much cash as you can for retirement. So, imagine trying to access your 401k or pension money only to find out it's there, but you can't touch it! As we continue to help you Survive in '09, Your Money Team finds that's exactly what's happening in this economy. 3-On Your Side's Jim Donovan explains how to protect yourself.
Dick Allen was laid off from a small environmental firm, then the company then went belly up. When he went to change his 401k plan, he got a big surprise. Dick had no access to his cash. His 401k plan was 'orphaned'. According to David Wray of the 401k Council of America, "An orphaned 401k plan is a plan where there is no fiduciary left to make decisions necessary to give participants their money. so people are left in a state of suspension."
Retirement and pension plans can be abandoned after a merger, when an owner dies or after a company bankruptcy. The Department of Labor estimates there are at least 15,000 orphaned company plans each year. Virginia Smith of the U.S. Department of Labor says, "If a 401k plan has been abandoned, it is extremely difficult for an individual participant to actually get access to his account."
So how do you know if your money is at risk? Monitor your benefits statements closely, even if your company closes or you leave a job on your own. If information stops, contact the plan sponsor and ask questions. Smith says, "If the participant is unable to get reasonable answers or to get any answers at all, then the participant should contact the department of labor."
The government has a plan to help distribute funds but, not all financial institutions choose to take part in the abandoned plan program. Dick's didn't so he ended up in court and after reaching a settlement is waiting for his money to be released.
For more information or to contact the Department of Labor call 1-866-444-3272 or visit:
http://www.dol.gov/ebsa/
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
Openly Gay Celebrities
Click to enlarge
Man Found Shot In Head Inside Old City Apartment 7 mins ago 
Teen Driver Charged In Fatal Bucks County Crash 7 mins ago 
6 Arrested In 'Horrifying' West Philadelphia Rape 7 mins ago 
Man Sought In Montco. Assault, Attempted Abduction 15 mins ago 
Stumble It!
Reporting
Comments