Billie Moore believes her 401(k) plan should be at least $7,000 richer. When this 52-year-old office manager enrolled in the plan seven
years ago, she believes she stipulated that half of her contributions go into a money
market account and the other half go into an equity fund. Every time she got her quarterly
statement, the only thing she looked at was the bottom line. Was it growing? Yes, she
noted.
It wasn't until a co-worker quit her job that Moore started
to pay more attention to her statements. As Moore's friend left, she bragged about taking
her $35,000 401(k) balance with her. The two were hired about the same time. Moore, with a
higher salary, believes she has contributed more to the plan, so she was puzzled about why
her own balance was only $33,000.
Questioned by Moore, the friend replied that most of the
money was invested in stocks.
And then the light went on for Moore. She'd been invested
in stocks as well, or so she thought. She checked her statement. "Lo and behold,
everything was in the money market account," Moore said.
Neither Moore nor her company's human resources department
could find a copy of Moore's enrollment form. Currently, both are waiting to see if the
plan trustee can find a copy.
If they do and it was filled out as Moore recalls, it's
possible her account could be credited for part or all of the missed amount.
She's lucky, some observers say. While 401(k)-plan experts
admit trustees will go out of their way to satisfy clients, Moore's experience may be an
extreme example of this generosity.
"It's a 50-50 shot that they might make her
whole," said Trisha Brambley, president of Resources for Retirement Plans, Inc.
After all, Moore received 28 statements showing her
investment allocation.
Ted Benna, creator of the first 401(k) plan and the
president of the 401(k) Association, says it's likely the plan might only refund a portion
of the lost money. "They might take the position, 'the burden is on you. You've been
getting the information. If it wasn't right, you should have come forward,'" he said.
While it's possible for Moore to try to sue, she might have
a hard time winning, Benna says.
So, what's the lesson? Keep your paperwork.
"You should have a binder on your plan," suggests
David Wray, president of the Profit Sharing/401(k) Council of America. "Every piece
of paper should be in that binder."
He urges employees to keep a copy of their summary plan
description along with all statements and confirmations of investment changes.
Another lesson: Read your statement. If Moore had paid
closer attention to her statement, she would have discovered this error years ago.
A final lesson: If you discover an error, notify your plan
administrator immediately, Wray said.
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