Hello and welcome to Financial Fix. Today’s story involves a 33-year-old New Yorker who tried to roll over his 401(k) and ended up losing $114,000. Instead of a secure electronic transfer, Paychex mailed him two paper checks—one for his 401(k) and one for his Roth. A thief intercepted the mail, cashed one check at Chase Bank and the other at Citizens, and vanished with the money.

He sued Paychex, arguing, as his lawyer Jonathan Corbett puts it, “Paychex is the entity that wrote the check, so Paychex has to be the one that goes to get the money back.” Paychex claims it has no fiduciary duty once the checks leave their hands.

Despite surveys showing 43 percent of rollovers still use paper, experts say electronic transfers are safer and more trackable. The IRS plans clearer guidance soon, but until then, anyone moving retirement funds should demand secure methods—whether digital or certified mail—to avoid a similar nightmare.
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