Higher 401k Fees For Not Having Social Media Accounts
Jericho, NY -- (ReleaseWire) -- 10/30/2014 --Connecting with old friends isn’t the only reason to start a Facebook account in your golden years. New rules issued by the US Department of Labor (DOL) regarding retirement funds proves that there are financial benefits to having a presence on social media.
According to a recent survey, about half of the 401(k) participants who left their jobs did not withdraw their 401(k) money a year later. When employees leave their 401(k) money behind it can be very difficult for their former employers to find them. Leaving your 401(k) money with your former employer may cause you to pay higher 401(k) fees if you don’t have a LinkedIn or Facebook page.
The U.S. Department of Labor (DOL) has issued updated rules on locating missing 401(k) participants. When a 401(k) is terminating and the former employee can’t be found online, by mail, or by phone, the trustee can hire a private investigator or use an online paid search tool. Unfortunately the cost for the private investigator or online search can be charged to the missing participant’s account.
“Most businesses don’t have the time to scour the Internet looking for former employees who have moved away. They are going to save time and money by hiring private investigators and charging the missing employee for the cost of the search.” says Brett Goldstein, Director of Retirement Planning at American Investment Planners, LLC. The updated rule is bad news for employers as the DOL considers the failure to take the appropriate steps to be a breach of fiduciary duty. This new rule might give rise to potential lawsuits by former employees who were charged a skip tracing fee, yet could be easily found on the Internet through social media.
In light of this new rule by the DOL, Goldstein suggests that employers create a missing participant policy detailing steps human resource managers should take to avoid lawsuits. Such steps should include keeping a record of Internet searches, keeping returned mail, transferring the funds to a state unclaimed property fund or roll over the money to an IRA. In order to avoid higher fees, Goldstein also suggests that former employees make themselves easy to find online through social media sites.
About Brett Goldstein
Brett Goldstein is Director of Retirement Planning at American Investment Planners, LLC based in Jericho, New York. He is an author, speaker and media personality who specializes in providing businesses and individuals with affordable retirement planning solutions. Goldstein's timely advice and tips have been featured on Fox Business Network, NY1, Fox Business.com, Kiplinger's, Forbes.com, Wall Street Journal Radio, MarketWatch.com, New York Daily News, The Chicago Tribune, and many others.
Brett Goldstein is available for interview: In the Greater New York City area; nationwide by arrangement.