Cramer on Retirement: Defending Your 401(k)

Experts advise keeping no more than 20% of your retirement portfolio in your company's stock, no matter how highflying you think your employer is. If you're already sensing trouble, try to diversify. Thanks to the Pension Act of 2006, companies must allow employees to sell shares received in a matching contribution after three or more years of service. (Used to be some companies required that you hold the stock until retirement.) Check with your benefits department.

Make Sure Your Deposits Don't Go Missing

Companies that are in bankruptcy are at best in a disorganized state. Although they are still responsible for making regular deposits into retirement plans, it doesn't always happen on time, says Davis.

Check your quarterly statements carefully to make sure that the money taken out of your paycheck is actually making it into your account. It isn't beyond distressed companies to divert that money elsewhere to try to stay afloat.

And pay special attention to any matching dollars. Not making the contribution is common when companies are in financial straits, although in recent years many employers have simply abandoned making a matching contribution at the first sign of trouble.

In past years, bankruptcies often led to what's known as orphan plans. Employees had trouble accessing their account, sometimes for years, while the courts determined who the new plan sponsor would be. The holdups left employees powerless to reallocate in the face of market losses. What's more, participants often had to take on extra fees.

New Labor Department regulations have helped prevent more orphan plans but many are still out there. What's more, bankruptcies can still cause 401(k) bureaucratic delays, albeit not as egregious as before.

If you think your retirement deposits are not getting transferred in a timely manner, you're facing other delays or glitches or you simply have questions about the status of your 401(k) plan, get help from the Web site for the Pension Counseling and Information program sponsored by the Administration on Aging: www.pensionhelp.org.

Don't Go Down With the Ship

If you change jobs or get laid off from a troubled company, immediately roll over your 401(k) into an IRA. That way you'll have control of your asset allocation and investments and avoid any bureaucratic hang-ups.

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