Finally the legal world is catching up with the bandits raiding people’s retirement savings. Judges might want to read all about this one, because it should be the beginning of a tidal wave.

Caterpillar should be praised for owning up to its actions, but the long list of other corporations raiding their own employees accounts with excess fees had better step up and settle, or they will be caught in the jaws of penalties for fiduciary-employers.

Fidelity had also better get out their checkbook and start practicing their zeroes; they will need to fund a lot of people they have ripped off with hidden fees for 30 years. If the Supreme Court will do its job, the Robert Johnson family (Fidelity owners) would be forced to disgorge 30 years of hidden, stolen fees.

In general, the largest percentage of administrative/managerial costs occur in the 401(k) plans of the smallest companies. A legitimate reason for this is that any 401(k) plan has certain administrative costs that are more or less fixed, and are therefore higher per capita in a small company because they must be shared by fewer people.

A reason that is not so legitimate is that many owners of small businesses are not very financially sophisticated and are “sold” high priced 401(k) plans by financial hucksters. One “sales pitch” that they use is that every company should have a 401(k) plan to compete for employees with the “big companies” that all have them. A SIMPLE retirement plan with an independent investment company such as Vanguard or T. Rowe Price would be a much better and less expensive option for most small companies with total assets of less than, say, $1 million in their retirement plan.

I will use ficticious names to protect the innocent. I had a 401k plan with the company I used to work for, we’ll call them Company “X”. I was terminated due to corporate down sizing and rolled my 401k into an IRA which I am able to manage myself. My question is, when I rolled over the IRA and sold the my shares of Company “X”, the selling price was well below closing price of the day I sold my stock. I would like to know why, and who received the differential money when the stock was sold? If Company “X” received it, I believe there is an ethics question (that wouldn’t surprise me knowing Comapny “X”’s past SEC record). I know the financial institution didn’t receive it because nothing was listed on my account statement as far as fee’s, losses, etc…. Somebody is making money on this set up and it’s not me. Just curious.

Frustrated-
There are a couple of possible answers to your question.
1. Stock held in 401(k) plans is usually unitized, not actual individual shares (called share accounting). Unitized stock is like a mutual fund made up of only company stock and a little bit of cash used to make distributions and exchanges without requiring an actual sale of the stock each time a request comes through. Because of the cash, unitized stock prices never match up to the price of the stock on the open market.

2. If you have share accounting stock, you really don’t know exactly when the stock was sold in order to accomodate your withdrawal. Stock settles in 3 business days, so it’s possible that the stock was sold 3 days before the check was cut. It’s also impossible to know at exactly what time of the day the stock was sold, and prices can fluxuate greatly throughout the day.

Most likely, #1 is your answer. You can contact your prior provider to confirm.