10/20/2025
🚨 When Trust Vanishes—So Can Your 401(k) Contributions
A recent The Wall Street Journal story told the experience of an employee who logged into her 401(k) account only to find over $50,000 missing. Her employer had withheld contributions but never deposited them. The company later dissolved, leaving workers scrambling and the Labor Department investigating.
This situation exposes a hidden risk in smaller retirement plans—especially those without annual audits or proper oversight. When plan sponsors delay or fail to remit employee deferrals, participants can lose years of savings growth and face long, uncertain recovery efforts.
That’s where fidelity bonds and fiduciary oversight matter:
• ERISA requires every 401(k) plan to carry a fidelity bond—typically 10 % of plan assets (up to $500K, or $1M if the plan holds company stock).
• The bond protects participants if someone with access to plan assets commits fraud or theft.
• Without adequate bonding and internal controls, employees may have little recourse.
For business owners, nonprofit boards, and employees alike, the lesson is simple: Safeguards aren’t optional—they’re essential.
If you’re unsure whether your plan’s fidelity bond or internal controls are up to standard, contact us for a fiduciary review.
