Latest news with #EmployeeRetirementIncomeSecurityAct
Yahoo
8 hours ago
- Business
- Yahoo
NYC man lost $114,000 — his entire 401(k) — after his physical check from Paychex was stolen and cashed
Dylan Handy did everything right — or so he thought. Two years ago, when he was 33, Handy tried to roll over his $114,000 401(k) after switching jobs. Instead of a secure digital transfer, Paychex sent paper checks. Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) Unfortunately for Handy, those checks were intercepted and fraudulently cashed. 'This outdated and insecure method remains standard practice in the retirement industry,' Handy told The New York Times. The kicker? Handy wasn't even told electronic transfer was an option. And more importantly, he may now owe taxes on a stolen account. So why are retirement plan administrators still using physical checks? And how can you protect your money and avoid ending up in a situation similar to Handy's? A 2024 survey by Capitalize revealed just how many people still deal with paper checks during rollovers — a whopping 43%. Americans are running out of patience. More than 80% of savers say rolling over a 401(k) should be as simple as making a bank transfer. But for those stuck with the manual process, it often means phone calls, long wait times and a lot of uncertainty. So why are plan administrators holding on to this outdated method? Physical checks persist because of legacy systems, regulatory concerns and a lack of standardized digital options. In Hardy's case, he's now in federal court suing Paychex after months of getting nowhere with banks and no reimbursement for the bulk of his lost savings. His lawyer argues Paychex is responsible. Paper checks in 401(k) rollovers expose savers to serious risks, including: Fraud and theft: Physical checks are easier to intercept, alter or cash without authorization. Delays and inconvenience: Mailing checks, waiting for them to clear and making sure they reach the right hands can take weeks — sometimes months. Capitalize found that 42% of savers experienced rollovers that took two months or more. Lack of transparency: Tracking paper checks and resolving problems can be a nightmare. In fraud cases, figuring out who's responsible and recovering money is often a complex, drawn-out process. Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says — and that 'anyone' can do it While protections like the Employee Retirement Income Security Act (ERISA) exist, they are limited. There's only so much liability coverage. If a check is stolen and cashed by someone else, blame may fall on the issuer, the accepting bank or the account holder. Sorting that out can take a long time. And even when a claim is valid, banks may take up to 90 days to respond. That you could be without your retirement funds for months. With check fraud and scams on the rise, protecting your money during a 401(k) rollover is more important than ever. Here are a few smart steps to keep your savings safe: Work with a qualified advisor: Make sure any financial advisor you consult is a Certified Financial Planner™ who's legally required to act in your best interest. The right advisor can help you avoid shady products and high-pressure sales tactics. Opt for direct transfers: Whenever possible, ask your 401(k) provider to transfer funds directly to your new retirement account. It's faster and more secure. Use secure mail: If a paper check is your only option, request certified mail with tracking. This cuts down the chance of interception. Monitor your accounts: Check your accounts regularly for suspicious activity. If something looks off, report it immediately. Stay informed: New scams pop up all the time — from fake self-directed IRAs to bogus investment platforms. The more you know, the easier it is to spot red flags. Check fraud isn't going away, so it's up to people saving for retirement to stay alert and take action. Even though some protections are in place, being proactive is your best defense. Your retirement money deserves better than a risky, outdated process, it deserves your full attention. Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now This is how American car dealers use the '4-square method' to make big profits off you — and how you can ensure you pay a fair price for all your vehicle costs Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
8 hours ago
- Business
- Yahoo
NYC man lost $114,000 — his entire 401(k) — after his physical check from Paychex was stolen and cashed
Dylan Handy did everything right — or so he thought. Two years ago, when he was 33, Handy tried to roll over his $114,000 401(k) after switching jobs. Instead of a secure digital transfer, Paychex sent paper checks. Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) Unfortunately for Handy, those checks were intercepted and fraudulently cashed. 'This outdated and insecure method remains standard practice in the retirement industry,' Handy told The New York Times. The kicker? Handy wasn't even told electronic transfer was an option. And more importantly, he may now owe taxes on a stolen account. So why are retirement plan administrators still using physical checks? And how can you protect your money and avoid ending up in a situation similar to Handy's? A 2024 survey by Capitalize revealed just how many people still deal with paper checks during rollovers — a whopping 43%. Americans are running out of patience. More than 80% of savers say rolling over a 401(k) should be as simple as making a bank transfer. But for those stuck with the manual process, it often means phone calls, long wait times and a lot of uncertainty. So why are plan administrators holding on to this outdated method? Physical checks persist because of legacy systems, regulatory concerns and a lack of standardized digital options. In Hardy's case, he's now in federal court suing Paychex after months of getting nowhere with banks and no reimbursement for the bulk of his lost savings. His lawyer argues Paychex is responsible. Paper checks in 401(k) rollovers expose savers to serious risks, including: Fraud and theft: Physical checks are easier to intercept, alter or cash without authorization. Delays and inconvenience: Mailing checks, waiting for them to clear and making sure they reach the right hands can take weeks — sometimes months. Capitalize found that 42% of savers experienced rollovers that took two months or more. Lack of transparency: Tracking paper checks and resolving problems can be a nightmare. In fraud cases, figuring out who's responsible and recovering money is often a complex, drawn-out process. Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says — and that 'anyone' can do it While protections like the Employee Retirement Income Security Act (ERISA) exist, they are limited. There's only so much liability coverage. If a check is stolen and cashed by someone else, blame may fall on the issuer, the accepting bank or the account holder. Sorting that out can take a long time. And even when a claim is valid, banks may take up to 90 days to respond. That you could be without your retirement funds for months. With check fraud and scams on the rise, protecting your money during a 401(k) rollover is more important than ever. Here are a few smart steps to keep your savings safe: Work with a qualified advisor: Make sure any financial advisor you consult is a Certified Financial Planner™ who's legally required to act in your best interest. The right advisor can help you avoid shady products and high-pressure sales tactics. Opt for direct transfers: Whenever possible, ask your 401(k) provider to transfer funds directly to your new retirement account. It's faster and more secure. Use secure mail: If a paper check is your only option, request certified mail with tracking. This cuts down the chance of interception. Monitor your accounts: Check your accounts regularly for suspicious activity. If something looks off, report it immediately. Stay informed: New scams pop up all the time — from fake self-directed IRAs to bogus investment platforms. The more you know, the easier it is to spot red flags. Check fraud isn't going away, so it's up to people saving for retirement to stay alert and take action. Even though some protections are in place, being proactive is your best defense. Your retirement money deserves better than a risky, outdated process, it deserves your full attention. Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now This is how American car dealers use the '4-square method' to make big profits off you — and how you can ensure you pay a fair price for all your vehicle costs Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
Want a Crypto 401(k)? The DOL Isn't Standing in the Way Anymore
The Department of Labor is getting out of crypto's way in 401(k) plans. The agency on Wednesday changed its tune about bitcoin and any other digital asset being included in employer-sponsored retirement plans. It rescinded guidance from 2022 that directed plan fiduciaries to use 'extreme care' when considering crypto. While that didn't forbid digital assets in 401(k)s, it didn't exactly help the cause. Now, the DOL says it is taking a neutral stance on crypto. The Employee Retirement Income Security Act 'does not prohibit any types of investments,' said Fred Reish, partner at law firm Faegre Drinker Biddle & Reath. 'The prior guidance didn't say that crypto investments were prohibited, but conveyed that it was dangerous for fiduciaries to allow crypto investments in a plan's core lineup or even in a brokerage window. That had a chilling effect on plan sponsors.' READ ALSO: Why Thrivent Wants to Hire Nearly 600 Advisors this Year and ETFs Unfazed by Market Volatility Options for including crypto to any extent in 401(k)s are thin. That may change, but plan sponsors are often hesitant to do anything with their investment menus that makes them stand out in any way. And that's not just for fear of regulators — there has been no shortage of class-action lawsuits involving 401(k)s and their investments. 'The majority of plan sponsors would never consider adding crypto into a retirement account anyway. That's the good news,' said Knut Rostad, president of the Institute for the Fiduciary Standard. 'The bad news is that this has been a clear message that the proponents can use for pushing crypto into these accounts in situations where the advisor is uncertain about whether he or she should do it. It's exchanging a yellow caution light, which we had before, with a green.' There are a few existing options for retirement accounts: ForUsAll, a consultant and record keeper, added a 401(k) feature in 2021 that allows workers to allocate up to 5% of assets and contributions to various digital assets through Coinbase Institutional. That firm did not immediately respond to a request for comment about the uptake within 401(k)s. Fidelity for several years has offered workers within its own company plan access to a bitcoin fund. The company, which this year rolled out crypto investing for IRAs, also did not immediately provide comments. A Case for Advisors. As popular as crypto has become, it's likely that many people on 401(k) investment committees haven't held or invested in it. That can be a problem, because the law requires fiduciaries to be competent and knowledgeable about the investments they select, Reish said. 'However, that 'deficiency' can be cured by the use of a knowledgeable consultant or adviser,' he said. Even so, any plans that opt for digital assets may limit the exposure to an allocation product or service, such as a target date fund or managed account, he said. 'On the other hand, plan fiduciaries may allow crypto investments to be included in their plans' brokerage windows.' This post first appeared on The Daily Upside. To receive financial advisor news, market insights, and practice management essentials, subscribe to our free Advisor Upside newsletter. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
Bitcoin and XRP could potentially be included in 401(k) plans
Bitcoin and XRP could potentially be included in 401(k) plans originally appeared on TheStreet. The U.S. Department of Labor has withdrawn its 2022 guidance that warned fiduciaries against including cryptocurrency in 401(k) retirement savings plans, the Department's Employee Benefits Security Administration announced on May 28. The 2022 guidance urged fiduciaries to exercise 'extreme care' while they consider adding a crypto option to a 401(k) retirement plan for participants. The Employee Retirement Income Security Act (ERISA) doesn't mention the 'extreme care' standard, so the 2022 directive marked a departure from ordinary fiduciary principles, the Labor Department noted. Jackson Chainwright, a pseudonymous crypto strategist and Substack author, said the move could quietly mark a turning point for crypto in retirement planning. 'This won't make headlines like an ETF approval, but it opens the backdoor. Fiduciaries now have less reason to avoid crypto, and that's going to matter when the next bull cycle makes Bitcoin and XRP too big to ignore.' Prior to 2022, the Labor Department usually articulated a "neutral approach" to particular investment types and strategies. The latest withdrawal of the 2022 guidance makes a return to the department's historically principled approach — neither endorsing nor disapproving of any fiduciaries planning to include crypto assets in a 401(k) plan. ERISA nonetheless requires a fiduciary to curate a plan's investment menu to maximize risk-adjusted financial returns to the plan's participants and beneficiaries. 'The Biden administration's department of labor made a choice to put their thumb on the scale,' Labor Secretary Lori Chavez-DeRemer said in a statement. 'We're rolling back this overreach and making it clear that investment decisions should be made by fiduciaries, not DC bureaucrats.' Earlier, the department asked fiduciaries to be cautious while considering crypto for 401(k) plans because of an array of reasons, such as the Securities and Exchange Commission (SEC) identifying crypto as "speculative and volatile investments," plan participants finding it difficult to make informed investment decisions, custody concerns, crypto valuations, regulatory concerns, etc. Matt Hougan, CIO at Bitwise, pointed out that the $9 trillion sitting in U.S. 401(k) accounts currently has near-zero crypto exposure. 'That will change,' he wrote on X, hinting at a coming shift in retirement investing. Bitcoin and XRP could potentially be included in 401(k) plans first appeared on TheStreet on May 29, 2025 This story was originally reported by TheStreet on May 29, 2025, where it first appeared.
Miami Herald
3 days ago
- Business
- Miami Herald
Trump withdraws Biden-era policy on warning against cryptocurrency 401(k) retirement investing
May 28 (UPI) -- The Trump administration on Wednesday revoked Biden-era guidance on cryptocurrency-related 401 (k) plans and other digital assets. President Donald Trump's U.S. Labor Department withdrew full guidance put in place in 2022 by then-President Joe Biden's administration. It advised American companies to exercise "extreme care" prior to allowing crypto-related retirement investments as an option for employees. It cited "serious concern" over the level of negative exposure for investors given reports of "significant risks of fraud, theft and loss" and with crpyto linked to ISIS and other acts of international terrorism. Now, the department says it's "neither endorsing, nor disapproving of" employers who opt to add cryptocurrency to a list of 401 (k) investments, adding that Trump's policy change will extend to a "wide range" of other digital assets such as tokens, coins, crypto assets "and any derivatives thereof." On Wednesday, U.S. Labor Secretary Lori Chavez-DeRemer said the Biden White House attempted to "put their thumb on the scale" to discourage crypto investing. Trump's Labor Department said in a compliance assistance bulletin that prior to Biden's 2022 guidance, the department had "usually articulated a neutral approach to particular investment types and strategies." "We're making it clear that investment decisions should be made by fiduciaries, not DC bureaucrats," the secretary posted to social media. It said a standard of "extreme care" cited by Biden's Labor Department was reportedly "not found" in the Employee Retirement Income Security Act, or ERISA, which gives a fiduciary duty to employers that oversee 401(k) investments. "In reality, it's saying we should treat crypto like any other asset," Philip Chao, a certified financial planner and retirement investment consultant, told CNBC. The shift arrived as the White House has exuberantly embraced the crypto industry while the president's crypto wealth has ballooned on paper through his own meme coin and as his two eldest sons pursue other crypto-related business ventures amid calls for ethics investigations. Last month, the U.S. Department of Justice ended its National Cryptocurrency Enforcement Team and redirected focus away from targeting crypto fraud. Deputy Attorney General Todd Blanche said DOJ will "no longer pursue litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets" as Trump allegedly has "actual regulators do this work outside the punitive criminal justice framework." On Tuesday, Trump's Truth Social platform announced its plans to establish a $2.5 billion "bitcoin Treasury." Meanwhile, Vice President JD Vance was scheduled Wednesday to deliver a keynote address at a bitcoin conference in Las Vegas. Chao, founder of Experiential Wealth in Cabin John, Md., says crypto is "such a new thing and there's no regulation or protection, even a reasonable understanding of it." "And there still isn't enough," Chao stated. Copyright 2025 UPI News Corporation. All Rights Reserved.
