Tony:

I had something like this happen a few years ago.

My company 401K offerred about 8 mutual funds, but did not offer any
stock index funds. I wanted a stock index fund.

The 401K plan did allow you to move your money to a 3rd party, who would
invest your money in any mutual fund you wanted. Of course the 3rd
party charged a semi-annual expense fee for this service.

I tried this for a few years until the company finally started to offer
a stock index fund as one of their regular funds...so I no longer had to
mess with the 3rd party deal.

The 3rd party deal was a big pain. You had to move your money from one
of the 401K regular funds to the 3rd party's money market fund. Once it
got to the money market fund, then you could tell them to transfer it to
the mutual fund you wanted. You could not transfer it directly to the
fund you wanted.

Then the 1st semi-annual fees from the 3rd party came due. Their
procedure was to first tap their money market fund for the fees. If you
had money in their money market fund, they took the fee from that account.

If you had transferred all your money from the money market fund to the
fund you wanted......like I did.....then there was no money in the money
market fund to pay the fee. The 2nd place they went after for the money
was your mutual fund. They sold enough of your mutual fund to pay the
semi-annual fees.......but oh by the way.....they charged you a trading
fee to sell the mutual fund shares as well. The trading fee was more
than the semi-annual expense fee :-(

When I finally figured this all out, a guy from the 3rd party told me I
should leave some money in their money market account...so I would not
get hit for the trading fee from selling my mutual fund.

The next year, I called the 3rd party and transferred a block of money
into their money market fund.....told the guy to leave a couple hundred
books in their money market......and put the rest in the fund I wanted.
The guy questioned why I was leaving some money in the money market
fund........I said to avoid the trading fee from selling my mutual fund
to cover semi-annual expenses. This guy was totally amazed.......he had
never heard of his company's trading fee in this situation......and
thought it was a great idea to leave some money in their money market !!

I decided this 3rd party made all their money from an excessive fee
structure..........and I thankfully got out when my company started
offering an index fund as a "regular" 401K fund.

Make some calls and figure out what happened to your money.

Good Luck

Dale Maley


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Tony Sivori wrote:

- quote -

A couple of months ago I enrolled in my companies 401k which is
administered by Principal Financial Group. I chose three investments:
American Century, Vanguard and Putnam funds. I opted for identical
investments and percentages for my 401k salary contribution, the company
match, and profit sharing.

A couple of weeks later, I got paperwork from my company's home office
confirming all of my enrollment and investment options. My pay statements
show that money is being deducted at the expected rate.

A few days ago I set up my user account at the Principal Financial
website. Much to my surprise I find that my funds are not invested as
directed and as the paperwork had acknowledged. The three funds I selected
are there, but the percentages are slightly lower. The missing percentages
total about 5% of my money which is being diverted to a Principal
Financial Money Market account, which I never authorized.

Has anyone else had this type of error when dealing with Principal
Financial? If there is a pattern, it seems to me that this is the kind of
thing that would interest the SEC.

--
Tony Sivori