Legal Question in Business Law in California

Re: 401 k

Count your lucky stars. Yes, the company should have invested the contributions according to your investment elections but this could be a rare "no harm, no foul" situation. Chances are, had your funds been invested, you would now be down 25-50%!

You will need to wait for a 401k expert for a more scholarly response. I just could not resist the temptation to make the foregoing observation.

Re: 401 k

Hello,

An employer is required by law to provide to employees a Summary Plan Description (SPD) of their 401(k), including information about eligibility, vesting and payouts. Since the money has not been invested and you were not aware of this fact it is likely that your employer has violated at least one ERISA rule by withholding information or by giving false information about the 401k plan.

Last February the Supreme Court held that employees can sue their employer over mismanagement of their 401K accounts. This is an option. You can read more about it at:

http://www.washingtonpost.com/wp-dyn/content/article/2008/02/20/AR2008022001157.html

Even though the employer might have mismanaged the accounts there is one upside: Many 401K plans have lost value in the recent financial meltdown. At least all of your money is still there sitting in the account and wasn't exposed to the risks (or rewards) of investing it. By saying this I'm not implying that what the employer did was right in any way.

Regards,

Re: 401 k

Be thankful the fund didn't drop like a rock with the stock market.

If you feel there was actual negligence in managing the fund, and think you can prove damages, you get to file a federal court lawsuit against the management of the fund. Not an easy case with the market now. Your remedy is to demand proper investment strategy now, whatever that might be. A crystal ball would help.