Ten Signs of Fishy 401(k)s

Many of us get instantly suspicious of anything that promises instant weight loss or quick riches, but few of us have ever had reason to suspect that something was amiss with our 401(k) plans.

Happily, most of us will never have to lose a wink of sleep over that dreadful possibility. However, the fine people at the Labor Department make it their business to be suspicious of some 401(k) plans, particularly when they get complaints from participants. The department has uncovered some cases in which companies have abused employee contributions, either by using the money for other purposes or by hanging on to the money for too long.

The Labor Department has assembled 10 warning signs that your 401(k) contributions may be misused. Make sure none of these sound familiar to you:

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1. Your 401(k) statement is constantly late or shows up irregularly. Most plans will issue statements on a monthly or quarterly basis. Often, you can get instant access online. One late statement shouldn't cause much worry. If you see a pattern of irregular or extremely late statements, do a little more investigating.

2. Your account balance does not appear to be accurate. You should have a pretty good idea of what's in your account based on your paycheck stubs. If your reported contributions don't match the amount you've asked to have deferred from your paycheck, there may be trouble.

3. Your employer failed to transmit your contribution on a timely basis. Those deposits should be made as soon as feasible, but no later than the 15th business day of the month after your employer withholds the money from your paycheck.

4. There's a significant drop in your account balance that cannot be explained by market conditions. Look back at your old statements and check the performance of your investments. If something's still missing, it might be your money.

5. Your 401(k) statement shows that a contribution from your paycheck never got deposited. Check on this immediately. It's always possible it's just a once-in-a-blue-moon error, but on the other hand, your employer could be misusing your money. Either way, you'll want to make sure those funds get into your account as soon as possible.

6. You did not authorize the investments listed on your statement. Under normal circumstances, you should be in control of all your investment decisions. If your plan changes its investment options, it should give you plenty of notice. If things change suddenly and without warning, check it out.

7. Former employees have trouble getting their benefits paid on time or in the correct amount. You're funding this account so you can someday use the money in retirement. If other employees have a hard time accessing their benefits, it may be a sign that the money's not there. Once you retire or leave your job, you can get more control over your money by rolling your balance into an IRA.

8. You notice unusual transactions, like a loan to your employer, a corporate officer, or one of the plan trustees. Run -- don't walk -- to your nearest Labor Department office and ask them to check it out.

9. You notice frequent and unexplained changes in the investment managers or consultants. Your 401(k) administration system should stay relatively stable, so these signs of instability could signal that something's gone wrong.

10. Your employer has recently experienced severe financial difficulty. The Labor Department has noticed that many 401(k) violations occur when a company gets into hot water. If you know that your company's seriously struggling, pay closer attention to your retirement account.

If you see any potentially nefarious behavior, contact the Labor Department's Employee Benefits Security Administration for help. It's in charge of enforcing the laws governing pensions and other retirement accounts. And while you're at it, stay away from those instant-weight-loss and get-rich-quick schemes, too

Fool contributor Mary Dalrymple welcomes your feedback. The Motley Fool has a disclosure policy.