Mr. Iyer, who has glaucoma and diabetes, retired last fall. He said he continued working far longer than planned because he could not withdraw any of his retirement savings — 41 years’ worth that he had earned at a variety of companies but had rolled over into his Penn Specialty account. He was also upset by the $49,728 in administrative and legal fees extracted from his account while it was in limbo. Mr. Iyer said. “It is interesting to note that the fees I ended up paying exceed what Penn Specialty Chemicals contributed on my account. I have learned never to trust a 401(k).”
Scary stuff. Like most people, my professional career has not been with one company. Rather, I've been with three companies and during that journey, started 401k accounts with each employer. My last company, let's call it Company B, had some financial strife and is actually no longer in existence. Shortly after I left Company B, really shortly, I rolled over my Company B 401k to Company C (my current company). I departed Company B with a group and some of the folks did, later, have some challenges in rolling over their 401k to Company C. The reason, like Penn Specialty, Company B ended up in bankruptcy and that delayed the ability of some of my co-workers to roll over those monies.
Now, my first 401k remains with Company A. The reason I leave it there is because I have access to some very highly rated, and low fee, institutional funds. However, I have thought about rolling it over to Company C. Now, after reading this article, it almost seems safer to have more than one 401k account.