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Asked 12/4/2008
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Are 401k funds FDIC insured like a savings account in a bank? Mervyn's clothing store has put a tempory stop on pay outs from 401k . My employees are concerned that they will never see portions of thier vested balances. Are these investments safe? |
Answer 1/3 - Submitted 12/5/2008
No, if they are invested in stocks, bonds, mutual funds these are not insured. If they are in money market accounts they are temporarily covered by the FDIC. If they are in CDs they are insured. If these are vested amounts paid into an account run by a legitimate company, they should be relatively safe. Sounds like the store has not actually paid in the money they were supposed to. What do you think?
Answer 2/3 - Submitted 12/8/2008
I'm not quite sure how to find that out. I do know that the creditors and the liquidating company took over all aspects of Mervyn's as of Nov. 1st, 2008, but benefits continued to acrue through November 28th. Could the falling markets have hurt their ability to meet these obligations? Would the creditors be liable for any missed contributions by the previous company? Thank you for answering my first Question.
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