By Martin Savidge Correspondent
NBC News
updated 3/28/2005 8:06:57 PM ET 2005-03-29T01:06:57

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."

The Department of Labor is responsible for looking into irregularities. But critics say there are only 485 investigators for 735,000 401(k) and pension plans, not to mention 6 million health and welfare plans.

"Most of the fraud — if you're going to find it — is going to be in small company plans, where it's likely that the employer is going to have kind of more control over the plan assets," says Karen Friedman.

Experts say in most cases the only real oversight of your 401(k) is up to you. Here are some warning signs:

  • Account statements that arrive late or at different times.
  • Inaccurate balances.
  • Company contributions that don't show up on time.
  • Drops in your account balance that don't match stock market swings.

Officials say most retirement funds are handled properly, but when they aren't the results can be devastating.

Just ask Raymond Reinheimer, who is now suing to get back the money he thought he had.

"It's been a hard deal," he says. "Real hard."

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