It's Your Money -- Keep an Eye On It! After your home, your 401(k) plan has the potential to be your next biggest financial asset.

An anti-fraud campaign by the Department of Labor uncovered a small fraction of employers who abused employee contributions by either using the money for corporate purposes or holding on to the money too long. Here are 10 "red flag" warning signs that your pension contributions are being misused.

1. Your 401(k) or individual account statement is consistently late or comes at irregular intervals

2. Your account balance does not appear to be accurate

3. Your employer failed to transmit your contribution to the plan on a timely basis. 

4. A significant drop in account balance that cannot be explained by normal market ups and downs

5. 401(k) or individual account statement shows your contribution from your paycheck was not made

6. Investments listed on your statement are not what you authorized

7. Former employees are having trouble getting their benefits paid on time or in the correct amounts

8. Unusual transactions, such as a loan to the employer, a corporate officer, or one of the plan trustees

9. Frequent and unexplained changes in investment managers or consultants

10. Your employer has recently experienced severe financial difficulty.

     

How can you protect yourself?  

The most important step is to look at your quarterly statement.  Open it when you get it, and compare it to the prior statement. Balances should begin where the last statement ended. Contributions into the account might not exactly match amounts withheld from your paychecks due to timing differences, but it should be possible to track each month's withholding into your 401(k) account.  You should compare how well your investment options performed vs. similar publicly traded mutual funds. Again, the yield on your funds might not match the public funds, but similar funds should produce similar results. The next step, if your quarterly statement raises questions, is to ask your 401(k) administrator to help you resolve those questions. You are your own first line of defense: don't stop asking questions until you are satisfied your money is being handled properly.