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Connecticut 401k

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What should an HR manager do if she thinks that 401k contributions are being misappropriated in Connecticut? Deductions are made from all the employee’s checks, but the 401k statements don’t show any deposits.

Based on the above description, it sounds as though the employer in question might have misappropriated funds that were supposed to go to the employee’s 401k account.

There are some states that are required by law to make good on any promised benefits.  This includes 401ks.  For questions about such laws, contact the Wage and Hour Division of the Department of Labor in the particular state of interest.

ERISA, otherwise known as the federal Employee Retirement Income Security Act of 1974, establishes minimum standards for the majority of voluntarily established health and pension plans within private industry.  It provides protection for persons holding interests in these types of plans, including 401ks.  ERISA is in effect throughout the entire United States.

ERISA does not cover any group health plans that have been established or maintained by a government agency or church.  ERISA also does not cover any type of plans that are maintained in order to comply with disability, unemployment, or workers compensation laws.  In addition to these rules and guidelines, ERISA does not cover any plans that are maintained outside of the U.S. that are basically for the benefit of unfunded excess benefit plans or nonresident aliens.

For individuals who suspect any wrongdoing with one of their benefit plans, they should contact the EBSA as soon as possible.  EBSA, or the Employee Benefits Security Administration, can be reached at 866-444-3272.  This agency should be contacted right away so that they will have sufficient opportunity to recover some or all of the missing funds. 

In 2006, the United States Department of Labor recovered more than $25 billion in employee benefit funds that had been misappropriated by some employers.  Some of these fund misappropriations included pension accounts, health care funds, and 401k pensions.

In some of these misappropriations instances, the funds had been used by company officials to buy cars, houses, condos, jewelry, or racehorses.  In California, one union used money to renovate a golf course that was owned by that union. JH