Rollover Distribution Check Lost

[coleboy]

A former employee requested that their 401k benefit be rolled over to his new employer. According to the plan set up with the fund carrier, all checks are sent to the former employer who is then supposed to forward them appropriately.

In this case, the former employer supposedly accidently threw the check out. He was supposed to have the check reissued but never did. Now this sizable benefit has been sitting in limbo for almost 2 months without being invested.

Is there some recourse to being able to get some earnings on that amount?

[hr for me]

Does the former employee also want to take any losses that might have occurred in the last 2 months? Earnings aren't always positive. And sometimes not being invested is actually helpful.

I personally had this happen with a sizeable rollover. After all was said and done, we received a very small amount of Money Market type earnings from the basic fund. But honestly I was just glad to have my money OUT of that recordkeeper/employer.

[ESOP Guy]

I can't think of any way to get earnings on those funds. For one thing who would make up the lost earnings? Whose fault is it the funds weren't invested. It seem like the person who threw the check away is the responsible party and he is the one wanting the earnings made whole.

[coleboy]

ESOP Guy, it was the former employer who threw the check out not the employee whose check it was. I would think the former employer would be responsible but I guess there's no way of forcing the issue.

Thank you to those who replied.

[ESOP Guy]

Sorry I missed the ee vs er in your fact set.