401K - Where is my money??

[JRDiMarco]

What is the name of your state?NJ
My wife works for a company that has been having financial problems. On her 401K statement, it shows that her balance is about $5,000 less than it was the last statement. When she went to her employer, they said that it is because they switched plans and that the rest of her money is with a 3rd party plan administrator and that the problem will eventually be resolved. Any idea if this sounds legal and should I be concerned?

Thanks

 

[Beth3]

Yes, I'd be concerned. I'm not sure about what exactly but there's clearly some problem occurring. I've worked with Plans that switched investment advisors and none of the funds ended up with a third party due to some sort of problem.

I'd suggest your wife go back to her employer and nicely ask for an explanation as to precisely what this problem is. I'm not saying anything illegal is going on but your wife and the other participants are entitled to a full explanation of the current situation. If it's not forthcoming, then she should call the federal Department of Labor.

 

[JRDiMarco]

Ok, here is the companies answer.....
"Up until this year, Fidelity Investments held all plan assets in a single "omnibus" account, which is quite common in 401K plans. Due to certain changes at Fidelity, it was decided this year to begin the process of transfering all assets to individual accounts in the name of each plan participent. We expect that the process to be completed by the end of the current quarter (sept. 30) You will receive the usual quartelry statement from the plans third party administrator showing the full value of your account by the end of July."

But when she called Fidelity to ask what was going on, they have no record of her account and no record of the companys account. When looking back on her statement it shows the name of 2 of the partners in the company.

Sound strange or is this how it works?

Any advise is appreciated.

Thanks