Protecting Yourself From 401k Looting

by Dual Income No Kids on December 19, 2006 · 0 comments

Being a criminology student, I’m always on the lookout for information that pertains to both finance and criminal activity! Well, this morning a good friend of mine sent us a great USA Today article on 401k theft. The article basically says that smaller companies (e.g. with less than 100 people) have a higher risk of theft from company 401k plans. The main reason why this sort of thing happens is that there isn’t a lot of regulation of 401ks because they are so new.

The article from the USA today is here. There have been a couple of follow up stories in local media, here and here.

The major thing about white collar from (like 401k theft) is that its hard to see when someone is stealing from you. Its not like street crime, when you know that you’ve been robbed. What I think this illustrates is that you might consider two things to protect yourself:

1) Keeping an eye on your 401k account.

2) Monitoring your companies financial statements.

Keeping an eye on your 401k will let you know if your money is still in your account. Monitoring your companies financial statements will let you know if management is experiencing financial problems and whether or not they have incentive to steal.

Hope this helps!

Best,

James

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