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  1. #1
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    May 2008
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    Default Former Employer Gave Personal Info To Third Party Without Authorization

    My question involves labor and employment law for the state of: California

    I worked for this company from March 2007 thru September 2007. I received a letter in the mail today, dated April 30, 2008, welcoming me to my 401k plan. I never signed up for this 401k plan, nor did I authorize the release of my personal data (SSN, DOB, name, address, etc) to this 3rd party company. When I called the 401k company and advised them the account was opened without my authorization, they told me I would need to contact my former employer to have them close the account. The 401k company refused to close the account for me. I do not want to have any contact with my former employer, and don't feel I should have to. There is a $0 balance in the account. 1) What action can I take against my former employer for releasing my personal data to a 3rd party without my authorization? 2) How can I get this account closed without having to deal with my former employer?

    If this post would better apply in another section of this board, please let me know which one

  2. #2
    Join Date
    Jun 2006
    Location
    Massachusetts
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    Default Re: Former Employer Gave Personal Info To 3rd Party Without Auth.

    Many employers now have policies under which you are automatically enrolled in a 401k unless you specifically take steps to prevent it. These are entirely legal and no action can be taken against the employer for acting on it.

    If there is a $0 balance in the account what's the big deal about closing it? If you don't work there any longer, nothing else is going to get put into it.

  3. #3
    Join Date
    May 2008
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    5

    Default Re: Former Employer Gave Personal Info To 3rd Party Without Auth.

    The account was opened April 30, 2008. I left the job in Sept 2007. I never signed their employee handbook because I didn't agree with many of the companies policies or lack there of. Other employees did fill out paperwork to enroll in the 401k plan which was optional, however I did not. The 401k company refuses to close the account. I talked to 3 different people there. I do not appreciate sensitive personal information being given to a company that I do not wish to have a business relationship with. Companies like this tend to share information within their "family of companies", etc., or worse could sell my data, or have a security breach like so many other companies have. I am very cautious about who I give this type of information to.

  4. #4
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    Massachusetts
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    Default Re: Former Employer Gave Personal Info To Third Party Without Authorization

    The 401k administrator does not have the authority to close the account. I can GUARANTEE you that 401k administrators DO NOT sell the information about people who have an account with them. That NEVER happens. Nor do they have "families of companies" that they share with. They are VERY heavily regulated and your information will not go ANYWHERE.

  5. #5

    Default

    Having worked on both sides of the 401k fence (both in administration and as the client/employer), I am betting that the employer sent data to the TPA to either (1) set up the plan prior to the point in which you terminated or (2) so they could perform required mandatory testing.

    They do not have to have your permission to pass information to the 401k plan administrator.

    Honestly even if you do not "enroll" or choose to participate, if you are eligible, there are times they must give the TPA the information (possibly for coverage and nondiscrimination testing that is required for non-safe harbor 401k plans). I send data on all employees each year for the required testing. (under IRC 401).

    The TPA will generally not have the authorization to "close your account". Only the employer would. They would need to tell the TPA to delete your account. Even if you had put money into the plan, the TPA could not release it without confirmation from your employer that the distribution was occuring for plan related reasons (termination, inservice withdrawal, hardship, loan etc).

    I would suggest writing a letter to your former employer and asking that your account be closed/deleted etc as of the end of whatever plan year ended in the same year you terminated. But honestly, for historical purposes if you were ever eligible, they probably won't delete the records. I suspect rather that at some point your account will go "inactive" after a certain amount of break in service. But I suspect they will stop sending you information since your account is $0.

    One last thought -- the only real information that an employer must keep confidential is information relating to HIPAA and ADA. Other than that there are generally no confidentiality laws. However, most employers do their best to keep employee data private. But there are times where certain data must be provided to TPAs so that benefit plans can be administered. Even employees who choose not to participate.

    editted to add: I have been a participant in 401k plans for close to 17 years and DH for about 15 years and we have never received any information from the "family of companies" of any of the administrators. I did receive fund prospectuses based on the funds my money was allocated in....but never any solicitation unrelated to my funds. We have been with American Funds, Mercer, John Hancock, Putnam, Great West, Morgan Stanley, Fidelity, TIAA-CREF, etc. just to name a few since DH has changed jobs quite a few times. When I worked on 401k administration, we never gave employee information or addresses to any of our "family of companies" or even really shared it with any other benefits department (pension, communication, compensation, etc) without the company/client's prior approval.

  6. #6
    Join Date
    May 2008
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    5

    Default Re: Former Employer Gave Personal Info To Third Party Without Authorization

    From their privacy statement on their website:

    The ******** Family of Companies protects your privacy. We have strict policies to keep your nonpublic personal information private. We may share it with affiliates and third parties that we do business with, and in other ways permitted by law.

  7. #7
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    Massachusetts
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    Default Re: Former Employer Gave Personal Info To Third Party Without Authorization

    And I seriously doubt that the ONLY thing they do is administrate 401k's.

    The fact that they may share information with affiliates on other services they provide does NOT mean that they will do so on heavily regulated 401k information.

    However, it is clear that you are going to believe what you want to believe regardless of what anyone else tells you or how much experience they have with the situation. So why don't you go ahead and see if you can find a lawyer who will sue the 401k administrator for not closing your account, which they cannot do under the law, or for potentially giving out your information, which they have not yet done. See if you can find a lawyer who will sue your employer for following the dictates of the 401k plan document.

  8. #8
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    May 2008
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    5

    Default Re: Former Employer Gave Personal Info To Third Party Without Authorization

    Quote Quoting cbg
    View Post
    And I seriously doubt that the ONLY thing they do is administrate 401k's.

    The fact that they may share information with affiliates on other services they provide does NOT mean that they will do so on heavily regulated 401k information.

    However, it is clear that you are going to believe what you want to believe regardless of what anyone else tells you or how much experience they have with the situation. So why don't you go ahead and see if you can find a lawyer who will sue the 401k administrator for not closing your account, which they cannot do under the law, or for potentially giving out your information, which they have not yet done. See if you can find a lawyer who will sue your employer for following the dictates of the 401k plan document.

    WOW! My issue is not with the 401k company. My issue is with my former employer not safe guarding my personal information. They opened this account 7 months after I terminated employment with them, with no intention of ever depositing money into the account. I only worked for this employer for 6 months and according to their own policies wouldn't have been eligible for their 401k plan until after one full year of employment. My only issue with the 401k company is the fact that they are refusing to close an account that I have informed them was opened without my consent.

  9. #9
    Join Date
    Jun 2006
    Location
    Massachusetts
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    Default Re: Former Employer Gave Personal Info To Third Party Without Authorization

    And you have been told that it is not within their authority to close the account. You are insisting that they do something that it is not legal for them to do.

  10. #10
    Join Date
    May 2008
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    5

    Default Re: Former Employer Gave Personal Info To Third Party Without Authorization

    cbg, what is your backround with this type of situation?

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