Two years ago, a guy named Handy tried to do something that should be dead simple in 2025: roll over his $114,000 401(k) after changing jobs. He was 33, building toward his future. But instead of a clean, secure digital transfer, Paychex sent him—wait for it—paper checks.
And then the real disaster struck: those checks were intercepted and fraudulently cashed. That $114,000? Gone. Just like that. Now Handy’s stuck in federal court, chasing down money that was supposed to carry him into retirement.
And here’s the kicker: no one even told him a digital transfer was an option.
Let that sink in.
This Shouldn’t Still Be Happening
Paychex is not some back-office operation with a fax machine and a dusty Rolodex. They’re one of the biggest payroll and retirement administrators in the country. But Handy’s story highlights what I’ve been shouting from rooftops for years: too much of the retirement industry is still stuck in the 1990s.
According to a 2024 Capitalize survey, 43% of 401(k) rollovers still involve physical checks. That’s almost half the market. And more than 80% of savers say the process should be as simple as sending a bank wire.
Instead, they get phone trees, hold music, weeks of waiting, and checks that can vanish into thin air.
Why Are We Still Using Paper Checks?
It boils down to three things: legacy systems, regulatory inertia, and a stunning lack of urgency from some plan providers.
The systems that run many retirement plans were designed decades ago. Updating them means time, money, and effort—things some providers aren’t exactly eager to spend if the Department of Labor isn’t forcing them to. So they do the bare minimum. And savers pay the price.
In Handy’s case, that price was six figures.
Paper Checks Are a Gift to Criminals
This isn’t theoretical. Paper-based rollovers expose people to:
• Fraud and theft: Checks can be intercepted, altered, or forged with shocking ease. It happens all the time.
• Delays and frustration: Mailed checks get lost or delayed. Some rollovers take months—Capitalized found that 42% took longer than two months.
• Zero transparency: Good luck getting real-time updates or tracking a check that’s already disappeared into the system.
Worse still, protections like ERISA, while useful, are limited. If your check gets stolen and cashed, you may be stuck in a legal no-man’s-land between your old provider, your bank, and the receiving custodian. Meanwhile, your retirement sits in limbo.
Here’s How You Protect Yourself
If you’re rolling over a 401(k), treat it like you’re moving a briefcase full of cash across state lines—because in some ways, you are. Here’s how to stay safe:
• Demand a direct transfer. Don’t settle for a check. Push your provider to wire the money straight into your IRA or new 401(k). It’s secure and traceable.
• Hire the right help. Work with a Certified Financial Planner™, not a buddy with a business card. You want someone bound by fiduciary duty, not commission checks.
• Track everything. If you’re forced to accept a check, send it by certified mail and keep every receipt. If anything goes sideways, documentation is your best friend.
• Watch your accounts. Fraud doesn’t always come with fireworks. Check your statements regularly and report anything suspicious ASAP.
• Stay ahead of scams. From fake self-directed IRAs to shady rollover “services,” there’s no shortage of traps out there. Education is your best defense.
Your Money Deserves Better
Retirement savings should not be vulnerable to outdated processes and broken systems. Handy’s case is tragic—but it’s not unique. I’ve seen this story play out too many times. Until the industry catches up with the 21st century, it’s on savers to be their own first line of defense.
Your future deserves more than a check in the mail. It deserves security, clarity, and accountability. And if your provider can’t offer that? Find one that can.
