austin3515 Posted March 18, 2013 Posted March 18, 2013 What are you doing to validate when a participant calls up to change their address? We have been either a) getting verificatiojn from plan sponsor, or b) completed address change form, notarized. Austin Powers, CPA, QPA, ERPA
12AX7 Posted March 18, 2013 Posted March 18, 2013 Nothing. If assets are on a platform, we use their forms. Otherwise, I don't get too concerned about it. Should I be concerned?
austin3515 Posted March 18, 2013 Author Posted March 18, 2013 We work with some platforms where we are responsible for providing new addresses. A lot of platforms will take direction from us when addresses change. Other examples are pooled accounts and FBO accounts (we're talking about participants who perhaps terminated years ago and have moved a few times). Austin Powers, CPA, QPA, ERPA
12AX7 Posted March 18, 2013 Posted March 18, 2013 With most of my plans on platforms, I would not collect addresses and have the participants make changes directly with the vendor. However, in your sitatuation the approach is very practical but you seem to have some underlying concern where the address is not verified.
austin3515 Posted March 18, 2013 Author Posted March 18, 2013 Well, sure, my concern is that an imposter might impersonate a participant in order to obtain access to their life savings. Austin Powers, CPA, QPA, ERPA
12AX7 Posted March 18, 2013 Posted March 18, 2013 Ok, I see what you are saying. Usually, my request for an address change would come from the Plan Sponsor on behalf of the participant. I never had a participant or someone claiming they were a participant asking me directly to make an address change. Usually, I would get an email from the client asking how Joe Participant can chang his address. I never thought about an imposter calling a TPA to make an address change. That would be very clever planning !
david rigby Posted March 18, 2013 Posted March 18, 2013 I never thought about an imposter calling a TPA to make an address change. It happens often. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
austin3515 Posted March 18, 2013 Author Posted March 18, 2013 I think the most realistic example I can come up with is a disgruntled spouse/former spouse doing it, but I think anything is possible. Rigby, are you saying imposters often call, or that participants often call you directly for address changes? I don't think I've actually ever heard of an incident Austin Powers, CPA, QPA, ERPA
david rigby Posted March 18, 2013 Posted March 18, 2013 This is a form of "phishing". Every recordkeeper should be aware of the dangers and include safeguards. Discuss those safeguards with the plan sponsor. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
austin3515 Posted March 18, 2013 Author Posted March 18, 2013 So you're saying that this does happen regularly inside 401k plans? Are there any articles, etc that discuss this? Austin Powers, CPA, QPA, ERPA
Belgarath Posted March 18, 2013 Posted March 18, 2013 There has been a discussion or two on this subject on these boards within the last year, I think. I'll see if I can dig one out for you.
12AX7 Posted March 18, 2013 Posted March 18, 2013 Within my experience, It appears to be a safe situation if the Plan Sponsor makes the request on behalf of the participant. How could I further safeguard against a fraudulent request under these circumstances? Furthermore, how would one protect an address change that is fraudently made directly with a platform vendor? Changes often occur without my knowledge. I had never given too much thought to the process, but then again I'm not aware of an incident that Mr. Powers has speculated on.
austin3515 Posted March 18, 2013 Author Posted March 18, 2013 Platofmr vendors, I am told, will mail address change confirmations to the old address when someone changes and address over the phone as a pretty neat safe-guard. A lot of times the issue with using the plan sponsor is that the plan sponsor may have lost touch with the participant and have no way of verifying the address. The notary option comes in handy in this instance. Austin Powers, CPA, QPA, ERPA
Belgarath Posted March 18, 2013 Posted March 18, 2013 Austin - for some reason I seem to only be able to go back a year on my posts. Obviously, it was longer ago than that - time flies when you are having fun! But there was, as I recall, some fairly extensive discussion on a fraudelent emptying of the account - and whether it was a related court case or I'm just mixed up, I seem to recall a situation where the participant ignored certain steps to change adress/protect passwords, etc. - so the fund/Trustee wasn't liable. As you can see, I'm really hazy on remembering this!!
PensionPro Posted March 18, 2013 Posted March 18, 2013 http://www.gpo.gov/fdsys/pkg/USCOURTS-ca10-10-05123/pdf/USCOURTS-ca10-10-05123-0.pdf PensionPro, CPC, TGPC
austin3515 Posted March 18, 2013 Author Posted March 18, 2013 http://www.plansponsor.com/401k_Participant_at_Fault_in_Account_Withdrawal_Dispute.aspx Write-up of that case. Thanks PensionPro! Austin Powers, CPA, QPA, ERPA
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