We trust our nest egg will be there when we need it, but what happens if your employer goes out of business and the money you stashed away is tied up in red tape?
“Three-and-a-half years as an electrical apprentice.” David Thomas knows the electrical trade, but he's in the dark trying to retrieve retirement savings from a bankrupt former employer. “I worked for it, it came out of my paycheck and now when I’m trying to roll it over I can't."
The Ralston couple says they didn't get the necessary paperwork needed after an electrical contractor closed down a decade ago. Only recently, David's 401K holding $2,000 was discovered by an investment firm, but the money is tied up in red tape. “The trustee says he doesn't remember being put on the plan as a trustee,” says wife Linda.
Fact Finders tracked down an attorney that dealt with the electrical company before it went belly up more than 10 years ago and he's shocked that an employee hasn't received his 401K benefits. But that attorney is working with the U.S. Department of Labor to get that money rolled over.
The attorney for the former company says finding records for workers like David has been a problem, but he's confident the 401K money will be retrieved and the Thomases say they can use it.
“I thought it would be there where I could take a hardship loan against it,” says David, who adds that losing a job can be a shock, but he learned to make sure all paperwork is filed right away so retirement savings will be saved.
“As employees, you want to make sure your money is safe and don't end up in the situation we're in right now,” says Linda.
The Department of Labor says employees don't have to work alone in retrieving funds from abandoned retirement plans. Advisers can be reached at 866-444-3272 or visit www.dol.gov.