Stop, Thief! What to Do if Your Employer Steals From Your Retirement Account


Theft |

Being stolen from is a horrible feeling. It makes you feel violated and just downright angry. After the shock wears off, your first instinct is to catch the thief and make him pay. The only thing you can think about are all the ways you’d like the thief to get payback.

But what should you do if the thief is your employer? In this case, you’ve got a sticky situation on your hands. And it’s a problem that shouldn’t be ignored; your future depends on making sure you get your money. Some unethical employers line their pockets at their employees’ expense, and it’s a practice they shouldn’t get away with.

Employers who have recently fallen on hard times are most likely to commit retirement account theft. They attempt to bridge financial gaps by relying on employee contributions. Fortunately, the Department of Labor is here to help. During 2015, Employee Benefits Security Administration investigators recovered more than  $4.9 million in retirement contributions that were stolen from employees.

Usually, if you contribute to an employer-sponsored retirement plan such as a 401(k), your employer deposits your contributions. However, some greedy employers pocket these contributions instead of depositing them into your retirement account. However, many employees don’t even notice because they don’t take the time to look at their account statements.

If you find yourself in this situation, there are steps you must take to make sure you get your money back. Here’s what to do if you suspect your employer is stealing from your retirement account.

Check your statements for retirement theft

401(k) statement

401(k) statement |

You won’t know if your employer is pilfering from your retirement account unless you check your statements. Make a point to carefully review your statements each pay period. You should approach this practice with the same diligence you apply to checking your credit card and bank statements. It only takes a minute or two to check your statements once you know what a red flag looks like.

Red flags

When checking your retirement account statements, it’s important to be thorough. Here are a few major flags to watch for.

1. Keep an eye out for partial amounts

payroll statement

Payroll statement |

One clue that something isn’t right is if you notice differences in the deposit amount. Check to make sure the withdrawal amount listed in your pay stub matches the amount on your retirement statement. If the amounts are less than what you see on your pay stub under the retirement contribution section, it’s possible your employer is skimming some cash off the top and then deposing whatever is left into your account.

2. Look for late deposits

Old bank sign engraved in stone

Old bank sign engraved in stone |

If you see that your employer is chronically late with deposits, this is a problem. Late deposits mean you’re losing out on earnings. Employers are expected to deposit retirement contributions as soon as they are able. However, the Department of Labor says deposits cannot be made later than the 15th business day of the following month. If you work for a small business, the time frame is usually tighter. Generally, an employer with fewer than 100 employees is required by the Department of Labor to deposit contributions within seven days.

3. Question a sudden decrease in account balance

retirement label on jar filled with coins

Retirement savings |

If your account balance has a significant drop, this is also a sign of trouble. The Department of Labor says you should be concerned if the decrease in balance can’t be explained by normal ups and downs of the market. For example, if you hear in the news about how well the stock market or bond market is performing yet your account balance continues to take a hit, you need to take notice and research the decrease more.

4. Look for missing contributions

Payroll concept image of a pen

Payroll concept image of a pen |

Also, look closely at your retirement statement to see if there were pay periods when no deposits were made. This is the most obvious sign you’re being stolen from. When reviewing your account, don’t just stop at the current year. Make sure to go back and check older statements to see when the theft started and exactly how long this has been happening.

What to do if you know retirement theft is happening

If you find that you have unknowingly become your employer’s piggy bank, it’s time to take action by calling in the officials. Here are some steps to take.

Call the department of labor

woman making a phone call

Woman making a phone call on mobile phone |

Your first step should be to place a call with the Department of Labor. Explain why you believe your employer has been stealing from your account. Make sure to have all relevant account statements in front of you. Clearly highlight or underline the areas on the statement that show you received a partial deposit, a late deposit, or no deposit at all. Whomever you speak to will ask you to send copies of your statements. Labeling the important parts of the statement will reduce your chances of running into delays.

Talk to your co-workers

Business colleagues talking

Co-workers having a discussion |

If this is happening to you, it’s very likely your co-workers are also victims. Tell them what you discovered and suggest that they review their statements. If your co-workers confirm their accounts have also been mishandled, encourage them to call the Department of Labor. The more people complain, the better the chance that your employer will be penalized. If several people are complaining from one company, this may convince the labor department that the theft wasn’t a mistake, especially if the behavior has been occurring for several years.  

Follow up

woman using smartphone and smilling

Woman using mobile phone |

After your complaint has been filed with the labor department, call back in a week or two and see if there are any other documents you need to submit. Don’t assume everything has been handled and that you can go about your merry way. It’s not uncommon for things to fall through the cracks from time to time, so always check back to see if the issue has been resolved. Also continue to diligently review your retirement statements. Once things are calm, it’s possible your employer could try to dip into your account again. Do everything you can to guard your money. If you see the same thing happening again, contact the labor department as soon as possible.

Follow Sheiresa on Twitter @SheiresaNgo.

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