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Monday, November 28, 2005

Old 403(b) found money: does this happen often?

This weekend, a check from UC Berkeley showed up in my mailbox. This was odd; it is far from typical for the University, my alma mater and my employer for a few years in the early 1990s, to send me any sort of check - as opposed to vast amounts of junk-mail and phone calls asking for money.

But apparently I had a 403(b) account while I was there that I had completely forgotten about. According to the statement, it had started with $300 in it, and it had grown to $2000 (!) over the past twelve years. Maybe I should put all my investments there! After thinking about it, I vaguely recall that the university had put me into the 403(b) plan just before I quit - two years after starting work there and enrolling in the plan.

Anyway, the University was switching plans so my old one was being closed. I happily put the money into my rollover IRA, while writing a check to cover the tax withholding as the university had withheld some state and federal taxes. I did some quick research and discovered that if I didn't cover the taxes, I'd get socked with more taxes on the taxes and a 10% penalty. (Odd that the dreaded Regents of UC find yet another way to get me to cough up a check, but I shouldn't look a gift horse in the mouth.)

Had this check not showed up, I would have never known this money existed. I wonder how many people have little piles of money sitting around the world that they don't know about?

Comments:
You apparently failed to give the plan administrator an address change somewhere along the line. But I'll bet your alumni association never lost track of you. When it comes to tracing down alums for donations, they're amazing!
 
This brings up a point that I have yet to see mentioned in any Financial Blog. When you are figuring your net worth, be sure to track down all your old pension plans. Contact the administrators and determine what your benefits are under the plans. Also find out if the plans allow you to move your money to an account you can monitor more closely.
 
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