Sunday, September 25, 2011

How do I know my 401(k) assets are safe from my company?

Here are some of the questions I have received over the years from employees concerned about their 401(k) assets:

Are my 401(k) assets safe from my company? Can my company withdraw monies from my account to pay company debts? Can they use my 401(k) account as collateral for a loan? What if my company goes bankrupt? Can my assets be seized along with the company’s? How can I be sure my company is forwarding my money to the mutual fund company on a timely basis or at all?

I usually answer by explaining that a 401(k) account is a separate entity from the company. This account is heavily regulated and can not be accessed by the company. I also tell them our 401(k) account is audited each year and as a part of this audit we must prove employee assets were transferred within Department of Labor guidelines. Currently our payroll company transfers employee deductions directly to our plan’s 3rd party administer shortly after our payroll has been run.

There was an informative article in today’s Milwaukee Journal that answers most of these questions: How safe is your 401(k)? by 401(k) adviser Michael J. Francis.

Francis explains Congress passed the Employee Retirement Income Security Act, known as ERISA, to safeguard qualified retirement plan assets in 1974. This act was a result of the demise of the Studebaker Motor Co. and the questionable business dealings of Jimmy Hoffa Sr. If you don’t know the story I highly recommend you read the article.

Francis informs us of ERISA's protections:
ERISA requires when your 401(k) contribution is withdrawn from your paycheck that the funds be deposited in a trust account, separate from your employer's assets and separate from any financial institution's assets.

This requirement protects you in the event your employer, or the financial institution that holds your retirement assets, runs into financial trouble.

This rule also protects 401(k) savings if you find yourself in the unfortunate circumstance of filing personal bankruptcy. This risk has always been an issue for business owners and professionals subject to malpractice lawsuits, but more people are benefiting from this protection in today's difficult real estate market.

There are two creditors, however, that even ERISA cannot protect you from: the IRS and a former spouse. The law states that if you owe either of these parties money, they can collect by a forced liquidation of your 401(k) account.
For a more informative answer to the basic responsibilities regarding timely 401(k) deposits I turned to the United States Department of Labor:
The deductions from employees’ paychecks for contribution to the plan must be deposited with the plan as soon as reasonably possible, but no later than the 15th business day of the month following the payday. If you can reasonably make the deposits in a shorter time frame, you need to make the deposits at that time.

For plans with fewer than 100 participants, salary reduction contributions deposited with the plan no later than the 7th business day following withholding by the employer will be considered contributed in compliance with the law.
On the US DOL website I also discovered What you should know about your 401(k) plan a comprehensive publication covering everything you should know about your 401(k) plan. To protect yourself the DOL recommends you should review regularly:
  • Make sure you have received the plan’s Summary Plan Description and read it for information on how your plan works. Read other documents you receive from your plan to make sure that you keep up with any plan changes, and check that the information on your benefit statement is accurate.
  • If you are in a defined contribution plan, ask for information on the investment choices available in the plan, and find out when and how you can change your plan account investments. 
  • If you suspect errors in your plan information, contact your plan administrator or the human resources department.  
  • If there have been changes in your personal information, such as marriage, divorce or change of address, contact your plan administrator or the human resources department.
  • Keep your plan documents in a safe place in case questions arise in the future.
Here are Ten Warning Signs your 401(k)Contributions are Being Misused:
  • Your 401(k) or individual account statement is consistently late or comes at irregular intervals
  • Your account balance does not appear to be accurate
  • Your employer failed to transmit your contribution to the plan on a timely basis
  • A significant drop in account balance that cannot be explained by normal market ups and downs
  • 401(k) or individual account statement shows your contribution from your paycheck was not made
  • Investments listed on your statement are not what you authorized
  • Former employees are having trouble getting their benefits paid on time or in the correct amounts
  • Unusual transactions, such as a loan to the employer, a corporate officer, or one of the plan trustees
  • Frequent and unexplained changes in investment managers or consultants
  • Your employer has recently experienced severe financial difficulty
 If you suspect a problem the DOL recommends:
Starting with your employer and/or plan administrator. If you find an error or have a question, in most cases, you can start by looking for information in your Summary Plan Description. In addition, you can contact your employer and/or the plan administrator and ask them to explain what has happened and/or make a correction.
If that does not resolve the problem:
Contact the Department of Labor’s EBSA for questions about ERISA, help in obtaining a benefit, or:
  • If you believe your claim to benefits has been unjustly denied or that your benefit was calculated incorrectly;
  • If you have information that plan assets are being mismanaged or misused;
  • If you think the plan fiduciaries are acting improperly; or
  • If you think your employer has been late in depositing your contributions

Wednesday, September 21, 2011

Anger in the workplace

I lost my temper with an employee last week. I was working with a manager from another department first thing in the morning when I spotted her. I turned and said, “By the way Sue I need the numbers for the XYZ report as soon as possible.” She responded with, “A good morning would be nice.” Sue has a reputation for being rude and difficult to work with. Many days employees will try to engage her in pleasantries (such as saying good morning) only to be completely ignored. I wrote about her previously here. She doesn’t work for me, but she does create some of the spreadsheets I work with and provides me with numbers for her department. She doesn't consider the work she does for me a priority and I struggle to get the information I need on a timely basis. I finished working with the other manager and stormed over to her desk proclaiming, “You should talk about Good Morning, we are lucky to get a good morning out of you once every six months.” She stomped off muttering something under her breath.

I went to her manager and asked him to have Sue email me the numbers I needed A.S.A.P. They were emailed to me within a couple of minutes. I ran into another manager while still worked up, telling him what had occurred and proclaiming I’ve had it with Sue I am pulling my spreadsheets from her and giving them to someone else.

First he high-fived me for standing up to her. Then he patted me on the back and told me to calm down, “You know this is a women thing. Women can’t work together and they never forgive.”

At the time I wasn’t in the mood to start another argument, but what does both Sue and I being women have to do with anything. When I lost my temper it was because I am a woman (by the way I can count on one hand the number of times I have lost my cool with an employee). Or the fact that Sue is rude to everyone is because she is a woman. When one of the other managers (who loses his cool all the time) gets angry people don't say it is because he is a guy they say, "Oh that is just the way Scott is."

Did my angry outburst accomplish anything?
I did get my report and I made the point that I am not going to sit back and take rude behavior anymore, but my relationship with Sue is now more strained than ever. Now when she sees me she turns her head or walks the other way. I will have figure out how to work with her all over again. Work relationships shouldn't have to be this hard. I refuse to apologize.

The real problem:
The real problem is that Sue has been allowed to treat her co-workers poorly for years with no repercussions. Her manager refuses to acknowledge that she is a problem. My own manager always says we don’t have to like each other we just have to learn how to work with each other. I think learning how to work with each other should include treating each other with courtesy and respect.

For another take on anger in the workplace see FrauTech's post where she asks: Can anger be an effective tool in the workplace? Or is it always out of line?

What are your thoughts on anger in the workplace?

Thursday, September 15, 2011

I've lost my job. Now what?

A guest post by Nicole Abdou:

“You've got a lot of choices. If getting out of bed in the morning is a chore and you're not smiling on a regular basis, try another choice.” ~Steven D. Woodhull (U.S. geologist, 1976-)

Something happened in late July that I thought I would never recover from – I lost my job. My greatest fear was realized as soon as my two managers walked into my office. One of them was based out of Atlanta, the other out of Tampa. When they entered my office unannounced, I knew it was over.

I handled it as well as I possibly could – I smiled, I thanked them for their patience, I wish the company luck, and I gathered my things. In less than 15 minutes, everything I had worked for was over. My purpose, or so I thought- was lost.

I went home and the best way I can describe my feeling was numb. I felt numb and shocked. I felt betrayed and humiliated. I just sat there, staring at the wall, and the once talkative, hyperactive girl, was now super calm and super void of any visual emotion. I went to bed wondering if this would change my life in a way I would not recover from.

Surprisingly, I awoke with a sense of calm and my head was clear. I knew, without a doubt, life WOULD be different, but it is entirely up to me which path I will take. I could lay in bed, feeling sorry for myself, waiting for people to come and console me – but the truth of the matter is, I am a grown woman with almost 20 years experience and a great education – I needed to pull myself up by my boot straps and make a plan.

That morning I made a list that would change my outlook for the rest of the time I was waiting for my “career life” to begin again. This list was broken into three different categories:

1. What I wanted.
2. What I needed.
3. What I could eliminate from my life.

Once I set a mini-plan in motion, I felt like I had a little more control over the situation.

For example, here are my top 3 in each category:

1. Get out of Non Profit.
2. Learn Arabic
3. Exercise More

1. Start the unemployment process
2. Organize my job search in a special notebook
3. Budget wisely

1. Unnecessary expenses: (ex. Gym Membership, etc.)
2. Annoying Conference Calls (that was more humorous than an actuality)
3. Waking up at 6am

Again, some of the list making was mainly humorous, but it did allow me to put life back in perspective.

Look – I’m not going to sugar coat it, unemployment is HARD. I will admit, I am on a bit of an emotional roller coaster, but one thing remains the same – it’s up to me how I react to things. I got the messy part out of the way first (unemployment, turning receipts to my old job, making sure the loose ends were tied, canceling my gym membership, filing a deferment for my student loans.) Once that was done, I could get to the business of a job search.

I spent about 3 days updating my resume and constantly applying for jobs. I made a point to wake up by 8am, and have a little to-do list. I would spend up to 3 hours searching and applying for jobs, and about another hour organizing something in the house. I made a point to call at least one friend a day, just to get that emotional support we all need. But planning out my day, and being smart about how I spent my time, this has given me the opportunity to not dwell on what went wrong.

If there is one piece of advice I can give you, just to weather the “unemployment storm,” is to focus on your next big move. This is actually a blessing in disguise! I know, I know.. hard to imagine it. But here is YOUR chance to be strategic. Find that next “it thing” you want to do – Go back to school, start your own business, or find that company that really fits your work/life style.

More importantly, take some time for you. No, I don’t recommend just lying around and crying, (though an evening or so of this can be quite therapeutic!) Read that book that is lying on your night stand, write in your journal, take a free class at your public library – just DO SOMETHING. If you have a spiritual side, then pray. If you prefer communing with nature – go for a hike. This is your time to soul search.

Focus. Plan. Eat Ice Cream on occasion. Pray. Talk it out. Cry if you have to. But move forward. Do what you have to do to get to the next part. I assure you, when we fast forward 1 year from now – it will all make sense.

Good luck!

Nicole Abdou, 38, is the author of Destination Unknown and former Communications Director. She lives in Birmingham, Alabama with her Egyptian husband. Traveling, photography, and Zumba take up her free time. In her blog, Destination Unknown , Nicole tackles every day issues from: Unemployment, to living in a multi-cultural marriage, to growing up in the south, and anything else that strikes her fancy!

She can be contacted at: Her blog:

Sunday, September 11, 2011

Remembering: A Lesson in Community

If you are a regular follower of my blog you may have noticed I usually post on Sundays. With today being September 11, 2011 my first thought was to not acknowledge the 10th anniversary of 9/11 and schedule my weekly blog post for Monday.

Then my brother who lives in NYC sent me this photo he took of the 9/11 memorial:

I found it so moving, I decided to include it in a post and write about how important it is to never forget what happened on 9/11. To include my own memories; where I was, who I was with, how I remembered the crisp air of that September day and what I had been wearing.

Then this morning I read a post on Florinda's blog The 3 R's. She writes about community, reminding us September 11, 2001 was a day that brought people together, no matter where they were.
She writes:
We haven't always consistently maintained that sense of community and connectedness throughout the last decade, but it's important to remember how important it is.
I put off writing this post and went outside to read the Sunday paper with my dogs. I wasn’t able to concentrate on my reading. I kept thinking about Florinda’s post and how unconnected I have become in the past ten years in my own community.

I thought back to the days immediately following 09/11/01. How time seemed to stand still as I mourned with friends, family, co-workers and even with strangers at the gym. We put our politics aside and banded together to raise money, share news or to just say hello. I thought about bipartisan politics and how divided we as a nation have become over the past ten years. About the long winter of protests here in Wisconsin, recall elections and families who are now divided between those who are union members and those who are not.

I thought of my own neighbors who before yesterday I hadn’t talked to in over a year. This past year the neighbors on my block joined together to create and pay for a neighborhood improvement project. My home’s property is located just outside of the project line, so I didn’t attend the planning meetings. Plus, their meetings conflicted with my favorite aerobic class; my husband did attend and kept me informed as to what was going on. Yesterday I walked down the block to take a couple of photos of the project.

I came home two hours later with a bag of flower seeds, freshly picked vegetables, new gardening tips, my photos of the project and a years worth of neighborhood gossip. Most of my neighbors were outside. They invited me into their yards and gave me tours of their gardens. I apologized for not attending their parties. I told one of them I still wanted to volunteer with a gardening group she works with and that I still planned on becoming a master gardener. Because these activities either occur while I am working or are too time consuming, my involvement would have to wait until I am retired - in ten years. She was flabbergasted - ten years.

My work is demanding, stressful and not community oriented. I learned earlier this year I had to say no to outside engagements for my own sanity. For the first time in eleven years, I am not on the board of an organization I am involved with and I must say I miss the community.

My current community involvement consists of on-line activity, going to work and to the gym. I have made several friends at the gym so when I do work out I feel as though I am taking care of myself and engaging in the community. Work is another story I will save for a future post.

My husband would say I spend too much time on-line. I do spend a lot of time reading other blogs, but I don’t comment or write posts as often as I should. I consider my blog’s regular commenter's my friends. Recently one of them experienced a health scare in her family then her home was threatened by Hurricane Irene. I found myself wishing I could call her to see if there was anything I could do and to offer my support.

In the end, I decided who cares where I was on 9/11/2001. I used this day and this post to reflect on my community involvement. My neighbor has a point; I can't wait another ten years to get involved. I have to figure out how to realign my life to include more community participation. I encourage all of you to reflect on your own community involvement. In addition to never forgetting what happened on September 11, 2001, it is important for all of us to consider how we can achieve our own sense of community and connectedness.

Monday, September 05, 2011

I’ve had my fill of Mary Kay Ash

I recently read Mary Kay Ash’s autobiography Mary Kay.

Motivation for reading:
800ceoread, a website dedicated to business books, provided a list of recommended business biographies including this list of business autobiographies from Fast Company. Miracles Happen : The Life and Timeless Principles of the Founder of Mary Kay Inc by Mary Kay Ash was included on the Fast Company list. Intrigued to read a book featuring a female entrepreneur, I picked up a copy from the library.*

What it is about:
Mary Kay Ash is a self-made businesswoman and founder of the Mary Kay Cosmetic Empire. In the book she chronicles her career as a salesperson and the creation of her cosmetic company using the lessons she learned from her sales career and her personal philosophies.

What I liked:
Her story:
Mary Kay Ash’s story is inspirational. From the age of seven when her mother instilled a can do spirit in Mary Kay (she had to prepare meals for her ill father and shop for her own clothes while her mother worked) she seemed destined to become a success.

Mary Kay originally aspired to be a doctor and went to school part-time while divorced, raising three children and working as a salesperson. Realizing she had a knack for sales, she dropped out of college. She spent the next 25 years working in direct sales. She retired in 1963 after being passed over for promotion numerous times by male co-workers. She intended to spend her retirement writing a book that would assist women in business. Instead this book turned into the business plan for Mary Kay Cosmetics.

Her success:
Mary Kay tells us she wasn’t the most talented she was just willing to make more sacrifices.
I think it was more than that. Mary Kay had the unique ability to blend the strategic big picture with the details. She used the lessons she learned in her 25 year sales career to create a company that enabled women to become financially independent. She instilled her values: God first, family second and work third as her company philosophy.

My favorite Mary Kay company principal is to encourage women to compete with themselves rather than with each other:
I've seen people step on each other to win a contest. That kind of competition is so destructive to morale within an organization that we’ve been very careful to avoid it altogether. (Pg. 19)**
She offers advice on starting a new company:
It is not wise to start a business unless you have something new or different or better to offer than is presently being offered. The best reason to start a new company is that there is a need for what you to offer or that you are better than what is being offered. When we began no cosmetic company was teaching skincare. (Pg 119)
Thoughts on communication skills:
I believe those who have the best communication skills become the most successful. Mary Kay thinks they make the best employees:
It was John D. Rockefeller who said:
I will pay more for the ability to deal with people than for any other commodity under the sun – sugar or wheat or flour. (Pg. 156)
Making others feel important
You give the gift of confidence by praising. (Pg. 156)

What I didn’t like:
Mary Kay lost me somewhere between the first thing her consultants are to do in the morning is put on their makeup and her recommendation that consultants involve their husbands in their business by having them do the bookkeeping and recordkeeping. Much of her advice seems dated, but then in the early 60's when Mary Kay Cosmetics was created a woman (meaning a middle-class white woman) working outside the home was still a novel idea.

More annoying than her outdated advice, I felt Mary Kay never took her sales hat off and her book was one big promotion for Mary Kay Cosmetics.

*It wasn’t until I was almost finished with the book I realized I was not reading the book on Fast Company's list. I had checked out Mary Kay: The Success Story of America's Most Dynamic Businesswoman the original Mary Kay autobiography from 1981.  Miracles Happen is the 2003 updated and re-released edition. At this point, I had had quite enough of Mary Kay and her company and was not about to check out the later version to see what if anything had been revised or updated.

Overall, I think the book would be a good read for an aspiring salesperson or entrepreneur. I have to give Mary Kay credit for creating a business that empowered so many women to go into business for themselves at a time when it wasn't the thing to do. Though, I do think I would have preferred reading a biography about Mary Kay and her business rather than reading her own words.

As to my thoughts on whether Mary Kay is a viable business opportunity, I am going to direct you to this article: Mary Kay Cosmetics: Destroying Half a Million Women a Year. It is written by Tracy Coenen a forensic accountant and founder of her own business Sequence Inc. I have heard Tracey speak a number of times and respect her judgment.

**Remember Robin from this post. Robin's co-worker's fixation with knocking her out of the #1 sales spot (and winner of all the prizes) was the driving force behind her resignation from her job.

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