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Wells Fargo 401K Plans Robbed — Thousands $ Missing

admin — Mon, 19 Jul 2010 03:03:34 +0000

According to a Minnesota TV station, a Wells Fargo 401(k) plan operations manager has been accused of robbing 401k plan accounts.

The 401k Operations Manager, who oversaw the 401k daily fund operations, allegedly disbursed money from dormant 401k accounts to fictitious names he created. He then had the checks sent to his own office and deposited the funds into his own account,

HOW THE 401K ACCOUNTS WERE ROBBED

Point-by-point, this retirement operations manager eluded what should have been Wells Fargos own financial and procedural controls. He:

Requested name changes on dormant 401k accounts,
Provided false Social Security numbers for the fake names, then
Requested the disbursements from the accounts, and finally
Reset the account information back to the original owners.

Where were the procedural controls? At each step in this alleged theft, there should have been procedural controls to prevent someone from taking these actions without either an independent review and / or supervisory authorization.
A lack of independent review or supervisory oversight was only half the problem. The other half was bundling the record keeping and the assets under the same organization.

When a 401k plans administration and assets are at the same organization, the risk of insiders bypassing their own procedural controls is always present.

Five Actions You Must Take Now to Protect Your Plans Assets.

You put your 401k funds into the hands of those who seem trust worthy. Whether it is greed or some other need that results in the abandonment of their obligations and responsibilities to you, you need to protect yourself and your plans assets.

Here is what you need to do now–

First:

Check with your plan administrator or record keeper to determine whether they are also holding your assets. You may find that your record keeping is being done by one subsidiary and your assets are being held by another subsidiary or division of the same company.

Second:

Request a SAS -70 or SysTrust audit of the system, procedural and financial controls on your 401k assets.

A SAS 70 audit is designed to provide information and assurance to clients and their auditors regarding the organizations procedural and financial controls. The auditor renders an opinion on whether the controls were suitably designed, placed in operation, and operating effectively. The SAS 70 auditors report includes the independent auditor’s opinion, a description of the service organization’s controls, and the results of the service auditor’s procedures.

A SysTrust audit is designed to increase the comfort of management, customers, and business partners with systems that support a business or particular activity. In a SysTrust audit, the auditor evaluates and tests whether or not a specific system is reliable when measured against three essential principles: availability, security, and integrity.

Third:

Require that all Plan information changes be authorized by a Plan Representative or Trustee.

Have a standardized form that can be completed by the 401k record keeper. The data changes must then be approved by a plan representative. Often you will find that the plan representative is the one supplying both the data and the approval. Be sure to get a quarterly report of all information changes and the reasons for the changes.

Fourth:

Require that all plan participant disbursements be first approved and authorized by a plan representative.

All plans have standard distribution forms that need to be completed and approved prior to a disbursement. Make sure that these forms are being completed. Have your record keeper complete a form even if it is for an automatic rollover participant, one of those whose balance is between $1,000 and $5,000 and is being moved to an IRA. Just like the information changes, an accounting of all disbursements from the plan should be provided to you on a quarterly basis.

Fifth:

Transfer your plan to an organization that can meet your financial and procedural control requirements.

In the review of your plans record keeper, you may find many of the necessary controls and procedures lacking or non existent. If your record keeper can not provide the types of procedures and controls that will let you sleep at night, then it is time for a change.

By implementing the five actions now you will have one less furrowed brow. If however, you cant implement these actions now, you will be lying awake nights with one eye open for your plans assets.

Time to Combine Your 401k Plans

admin — Sat, 10 Jul 2010 18:41:37 +0000

2006 is the twenty fifth year of the 401k investment plan. Have you had more than one job in the last 25 years? If so, then you probably have more than one 401k plan floating around.

401k plans are now over 25 years old. They seemed a unique idea at first, but now just about every employer offers one. And Im sure I dont need to tell you that they are a great way to save and earn money over the years.

The issue here is whenever you setup a 401k, you usually diversify your plan with your employer. Obviously, you must invest using the current options your employer offers, which is good. Investing a little in the high risk, some in the moderate risk, and some in the lower risk funds its typically the plan. You may have been a little more open on taking risk 20 years ago than you are today. Maybe now you are a little more conservative in your investment goals. So you think you are diversified, right?

Not really especially if you have ten plans with ten different employers. Remember you tried to diversify each one when you set them up. Well, ten different plans diversified the same way means that your portfolio is not really diversified at all. One employers moderate risk program may be another employers low risk plan. Your 401k 15 years ago where you invested in tech stocks was probably a high risk option. Now some of those high tech stocks are the most conservative investments.

The only way to manage your multiple 401k plans effectively is to combine them into one plan, under one investment portfolio and review it at least annually. One of the great things about 401k plans is they are transferable. The important thing is not ever to close a 401k and reinvest it, this is a taxable event. You can easily transfer your old 401k plans into an existing or a new 401k so you can manage your risk.

This is one time when everything under one umbrella is the way to go.

Rolling Over Your 401k Plan The Easy Way

admin — Mon, 10 May 2010 12:50:49 +0000

So what is a 401k retirement plan? A 401k plan is actually a retirement investments plan that is subsidized by employee or worker payments and often, corresponding involvements from your manager or employer. In addition, the most important draw for these plans is that the payments are taken from your pre-tax wage, and the funds rise tax-free until such time that it is withdrawn or pulled out. Also, the plans are, to some degree, independent and self-sufficient, and the good thing is that they are manageable and convenient.

401k retirement plans are for profit and many kinds of tax-exempt associations and institutes can create these plans for their employees and working staff. Moreover, a 401K plan is a corporation-supported retirement plan for workers. Payments and earnings in a 401K retirement plan are not subject to federal and most state income taxes until the account is withdrawn or pulled out. With a 401K plan, you can save and invest cash from a pre-tax starting point with the employers contributing corresponding funds to add to yours, which makes the plan even more profitable. Most of the time, you will have the option to choose how much you want to contribute, up to the maximum allowed by the government and also the option to choose where your contributions go. You pick your investment vehicle from a directory of funds provided by your retirement plan sponsor or manager.

You can learn when you are entitled and permitted to start contributing in your businesss 401K retirement plan from your assistance manager or director. In addition, once you are qualified to sign up, you will be given an inventory of funds in which you can choose to invest in. You can choose to invest the maximum of $14,000 in 2005 and $15,000 in 2006. There are numerous benefits and gains to 401k plans.
First and foremost, since the contributor is permitted to make a payment to his or her plan with pre-tax cash, it lowers the total tax taken out of every pay check. Subsequently, all company payments and several enlargements in the principal capital are free of tax until withdrawal. Moreover, the compounding result of steady cyclic payments over the phase of 25 or 35 years is remarkable.

In addition, you can decide where to target upcoming payments or place present savings, giving more power over the assets to the contributor. Consequently, if your company matches your contributions, it is like receiving additional funds on top of your earnings. In addition, unlike a regular retirement fund, all payments can be shifted from one business plan to another company plan if you change jobs.

Because the plan is an individual investment for your retirement its sheltered by the retirement fund (ERISA) laws and regulations. This gives you the extra security of keeping your funds from the hands of creditors in case of bankruptcy. This does not apply to household relations court cases that deal with divorce orders or child support orders. Indeed, a 401k retirement plan is a good way to start setting yourself up for an enjoyable retirement.

One Less Furrowed Brow For 401k Plan Sponsors

admin — Fri, 30 Apr 2010 09:03:37 +0000

There was a sneak preview of the Dept of Labor’s preliminary guidance on setting up 401k default investment options. These situations occur when 401k participants fail to select an investment option for their 401k contributions or a 401k default fund is used in 401k plans with automatic enrollment features.

Currently, 401k plan sponsors are rethinking their default fund decisions because they are concerned about the risk associated with their fiduciary responsibility and about the risk of the earnings performance of the default investments of those participants who failed to choose any.

When a participant fails to make a choice, the default fund is the choice made for them by the plans fiduciaries. And because the participant is NOT making the decision when a default investment is used, the plan fiduciaries are responsible to prudently invest their funds.

Many plan sponsors feel that their decision on the default investment is protected by the safe harbor exemption of Internal Revenue Code Section 404c. Section 404c provides an exemption to plan sponsors from liability for investment decisions when participants are given the choice to choose their own investments. Section 404c transfers liability to plan participants for their choices of investment options. Here, sponsors believe that by not making an active choice, the participant has decided to take the default investment.

And if the default investment is a Stable Value or Money Market Fund, the participant does not loose any of his principal. Plan sponsors feel that the participants funds are not at risk and so neither are they.

Because the participant is not making the decision when a default investment is used, there is no 404c defense for plan fiduciaries. Also, sponsors are required by ERISA to invest with a reasoned, thoughtful process for evaluating risk and returns and for providing investment options that are diversified and prudent.

Under the forthcoming guidance — which, said a Dept of Labor law specialist in the Office of Regulations and Interpretations, is subject to change 401k fiduciaries are given a safe harbor on 401k investment management decisions and any breach that is “the direct and necessary result of investing a participant or beneficiary’s account” in a default investment. Investment managers and advisers, on the other hand, are solely responsible for any decisions they make with regard to the 401k investments or any resulting losses and do not get that kind of relief.

In order to qualify for that 401k safe harbor, however, 401k fiduciaries must allow participants:

- the opportunity to move their investments into an alternate account
- provide advance notice of the default investment and
- invest the assets in a certain kind of qualified default investment.

Moreover, that choice, which can be a lifecycle fund or a managed account, among others, must limit the presence of employer stock in the portfolio, as well as allow funds to be transferred out of the default.

The 401k fiduciary responsibility associated with selecting funds for the default investment options in a 401k plan has now been tempered with this new preliminary safe harbor.

One less furrowed brow for 401k plan sponsors.

Knowing Your 401k Plan.

admin — Thu, 22 Apr 2010 13:04:54 +0000

Taking full advantage of your 401k plan today can help you achieve financial goals sooner, and provide enough income for a comfortable retirement. For most working people, Social Security checks alone will not be enough to maintain the standard of living they are used to, once they are no longer working. If you are lucky, your employer offers a 401k plan which, if used wisely and to the fullest advantage, can provide you with additional income for your golden years.

401k plans differ greatly depending on the employer who sets the rules. The only way to get the most out of the plan is to get to know it and make educated choices.

Things you should know:

- What is the maximum percentage of your salary you are able to contribute?
- Is your employer matching the contributions? If yes, what is your minimum contribution, before your employers contribution starts, and what is the maximum?
- What are the number of years you have to be with the company (so called vesting) to be eligible for the employers contributions to your 401k?
- How often can you switch among available investment options?
- Are earnings posted to your account on a weekly, monthly or quarterly basis? When do you get your account statements? Note, it is always more beneficial if earnings are added to your balance more often.
- What methods can you use to access the account? By phone, on the internet or only in writing?
- Did you spread your money among different investments to reduce the risk?
- Did you learn enough about the investments you are using?

Do you know that 401k plans are not insured by the federal government, and its investments are at risk? However, different investments carry different degrees of risk. It is always best to diversify your investments by investing in different types of assets. To find out more about 401k investment options, ask your plan administrator for information. Financial magazines, prospectus and brochures can be a good source for learning about particular investment options.

401k Retirement Plans Explained

admin — Mon, 08 Feb 2010 09:33:38 +0000

401k retirement plans are special types of accounts, financed through pre-tax payroll deductions. The funds in your account are invested in various ways. Your funds can be invested through any number of stocks, mutual funds, and other ways, and it is not taxed on any capital gains or interest until the money is pulled out or withdrawn. Congress approved this retirement savings plan in 1981, and its name was rooted from the section of the Internal Revenue Code that contains it, which is obviously, section 401k. One great advantage of this retirement plan is that the tax treatment is complimentary. Moreover, capital gains, interest and dividends are not levied until they are pulled out or withdrawn.

In terms of its investment customization and flexibility, 401k retirement plans offer employees and workers an extensive array of options and preferences as to how their property and assets are invested through time. Moreover, many businesses and companies permit employees to obtain company stock for their 401k retirement plan at a cut rate. However, many pecuniary consultants and counselors are not in favor of holding a significant percentage of your 401k plan in the shares of your boss or manager.

So what are 401k plans? If you are like most people, you probably have questions about your 401k retirement plan. You may be wondering how a 401k actually takes place, precisely what a 401k retirement plan is, or how you can be capable of stimulating the diminishing balance in your 401k plan. So how does a 401k plan actually work? If your company offers a 401k retirement plan, you can agree to join. You can also have the selection option of choosing the amount of funds you wish to put in from an inventory of funds presented in the 401k plan. Your payment will routinely be deducted from your pay check before taxes.

Every worker can invest up to a defined proportion of his wage into a 401k plan. Your involvement, along with any coordinated contributions from your employer, are then endowed into your chosen funds. These funds will produce interest before being taxed, and can be withdrawn when you reach 60 years of age. At this point in time, you must pay the income tax on the withdrawn funds. Furthermore, there are methods and means wherein you can pull out your funds before age 60. However, these early withdrawals frequently call for a penalty in conjunction with the payment of taxes.

A 401k retirement plan is an employer-subsidized retirement plan, and it is categorized into two groups: defined benefit and defined contribution. With this defined benefit plan, the employer pledges to give a distinct sum to those who want to retire and those who meet specified eligibility standards and measures.

401k Information-How To Decide Which Vehicles Are Best For Your

admin — Sun, 31 Jan 2010 22:40:34 +0000

401k Information-How To Decide Which Vehicles Are Best For Your Money?

The right 401k information is imperative in order to help you achieve your retirement goals. If you don’t have the right information, you’ll end up like most people-dead broke by the time you reach retirement. The stats are out and they arent good.

According to social the Social Security administration, if you were to take a hundred people at the beginning of the working careers attractive until retirement, here’s what you would find: one of the wealthy, four will be financially secure, five will be forced to continue working out of necessity, 36 will be dead, and 54 will be dead broke, and simply dependent on Social Security and welfare just for their mere survival. A 401k plan can help you avoid these unfortunate circumstances, and have enough money to live the kind of lifestyle you’ve always wanted to upon retirement.

First of all, a 401k plan has a tremendous amount of benefits to offer you. One of the best things about it is that you can contribute a lot of your pretax money to it, and this money is not taxed until you withdraw the money upon retirement.

Also, the employer will oftentimes contribute their money towards is well; obviously, this amount will vary depending on which company you work for.

Also, unlike a pension plan, the employee has a lot of control over which investments their 401k money goes to. This is a great benefit if you are financially educated, and understand investing. If you don’t, then you’ll probably want to leave this up your employer.

First of all, employees that have a 401k plan all have many different choices to invest in. In every case, they have a list of many different mutual funds sure to invest in 401k plans with. Also, they can invest in stocks, bonds, money market funds, USA savings bonds, etc.

No matter which investments you prefer, there is a choice for you. You don’t have the dead broke when you reach retirement; simply do your research, and find the right investments for you, attributes the 401k plan regularly, and you will achieve the retirement plan and lifestyle you want. Read 401k information in magazines and other sources, and educate yourself on the best investment vehicles you can place your money in. There are many different 401k companies for you to invest with, and finding the right one is imperative.

The biggest thing to remember from all this is that you are in control when it comes your finances and retirement plan. Don’t ever trust them it to somebody else; if you do this, you’ll have no excuse when you reach retirement you don’t have enough money to live the lifestyle you always wanted to.

Retirement should be about living the kind of lifestyle you’ve always wanted to, and achieving the goals either never got to achieve while you are working and dont have time. Follow this 401k information and you will receive the most benefit from your 401k plans as possible and be able to live your dream lifestyle in your later years.

Find SIPPs and other pension related savings accounts » 401k Plans

Wells Fargo 401K Plans Robbed — Thousands $ Missing

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Time to Combine Your 401k Plans

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