401(k) fraud is difficult to spot because beneficiaries do not always keep up with the performance of their accounts and often chalk up excessive fees to a poorly performing investment.
Americans pay as much as $60 million in fees for 401(k) management each year, however, and administrators have increasingly come under fire for gross mismanagement of ERISA protected plans.
In recent years, plan participants alleging 401(k) fraud have been increasingly successful in court and received money back from plan administrators.
If you have discovered excessive fees or a risky mutual fund in your 401(k) and are concerned about 401(k) fraud, there are several options. First, understand that ERISA entitles your covered retirement plan to certain protections.
Also, understand that the investment company your employer contracted with to provide your 401(k) plan and manage millions and even billions of dollars are also regulated by ERISA to work in your best interest.
Plan advisors have a fiduciary duty under the law and, if they break it, you are entitled to partial or even full compensation for your losses.
If you have been the victim of 401(k) fraud, it is also likely that your coworkers and even employees of other companies and organizations who have the same plan are also victims of 401(k) fraud. Taking action against investment brokers can help protect others who have worked hard to provide for their retirement under these plans.
The first step is to report your concerns about 401(k) fraud internally to your human resources department, plan administrators, and supervisors. While ERISA protects plan beneficiaries, it also provides an administrative procedure to address concerns about 401(k) fraud.
If your concerns include potential criminal activity, like theft or embezzlement, you should also contact local law enforcement.
The Employee Benefits Security Administration (ESBA) also manages reports of 401(k) fraud and can launch an investigation into violations of ERISA.
It can be daunting to make a report of 401(k) fraud. However, you should be aware that whistleblower protections can protect you from retaliatory actions. An experienced 401(k) fraud attorney can also help guide you through the complex administrative and legal processes and ensure you and others victimized by 401(k) fraud get the compensation you deserve.
Full story at Top Class Actions