03/29/2005: Another reason why privatization of Social Security sucks....
You have to trust the bastards who are running the system (and why exactly do you think you should trust the Bush bAdministration, which wouldn't know the truth if it came up and kicked any given one of them in the ass?). After all, as we learn, the money in your 401(k) might not really be there, even though your company has told you otherwise:
ATLANTA - Every year for 44 years Raymond Reinheimer got a report showing how his company retirement plan had grown. Things looked great — until he retired.
"I asked for my money, and I didn't get a response," says Reinheimer. "I knew there was something wrong."
Reinheimer says despite company statements showing he had $230,000, in reality his employer never put any money in the account.
"For whatever reason they didn't make the contributions, but they kept claiming they were," says Reinheimer's attorney, Allan Bruggeman.
Last year, Department of Labor investigators found more than 1,200 instances of money missing from 401(k) accounts. Compare that to just 34 in 1995.
"This could be the tip of the iceberg," says Karen Friedman, policy director of the Pension Rights Center.
Because employers may match employee contributions, the popularity of 401(k) accounts has soared in the last decade.
"There are almost $2 trillion in 401(k) plans," says Ann Combs, assistant secretary of the Labor Department's Employee Benefits Security Administration. "There is some element of society that is going to see that money and they're willing to take advantage of it."
Sometimes the money is simply stolen by people responsible for investing it. Other times financially troubled companies are tempted by the pool of employee contributions.
"They'll have cash-flow problems so they will start to use the money to float," says Combs. "That is not acceptable or permitted under the law."
Len on 03.29.05 @ 12:19 PM CST