Your 401 (k) Is Making a Statement

Doug Sutton has a small smile on his face as he uses his card key to unlock a brightly lit room.

We are deep inside a secure building. I have come to the room that during the past four years has been the source of a lot of emotional tumult: hope, expectation, and smug satisfaction; then surprise, uncertainty, and disappointment so thorough that the results can't even be faced. This is Doug Sutton's domain, and the emotions aside, he is rightfully proud of it.

We step into a low-ceilinged room about the size of a Gap store at the local mall. Parked here and there are enormous rolls of paper. They are squat, the shape of rolls of toilet-paper, but each one of them is shoulder high. The rolls of paper bear the distinctive, soft-green color of Fidelity's 401(k) account statements. It is thrilling; it is unnerving; it is odd. Hundreds of pounds of 401(k) statements -- blank, waiting to receive the numbers, waiting to deliver the news.

Forget CNBC, the Wall Street Journal, or even the investment portfolio that Quicken updates on your computer screen each day. In reality, the news about the market that really matters, the news that determines our sense of financial well-being, comes to millions of us four times a year from this unassuming room on top of a wooded hill, at the edge of rural Kentucky, 565 miles south and west of Wall Street.

This is the room in Covington, Kentucky, where Fidelity prints tens of millions of 401(k) statements every year, then zings them automatically into envelopes at a breathtaking pace and sends them forth to our mailboxes, from which they make their way to our kitchen tables. Where they lie, an invitation and a taunt. How is your 401(k) doing these days, anyway?

Fidelity is the number-one provider of 401(k) services in the country, and one in five people who have a 401(k) have it with Fidelity. I myself get two 401(k) statements from Fidelity. The operation behind the printing of those statements is a show of such technological hocus-pocus that it is distracting, absorbing. Fidelity doesn't just print 401(k) statements here, it prints almost everything that's part of its business -- daily trade confirmations, brokerage-account statements, 250 million envelopes of material a year, including 33,000 checks a day, for people taking a little of their money back from Fidelity.

The print load is so demanding -- one billion individual images a year, which comes to 2.75 million pages a day -- that the lights in the print room never go out. Each of 14 printers can print 1,060 pages a minute -- 1,060 individual 401(k) statement pages showing "Your Account Summary" and "Your Asset Allocation" and the always-popular "Market Value of Your Account." The statements are moving way too fast to be read -- company logo, recipient name, account values. They blur past at 17 per second, the whole river of pale-green page ones flipped midstream and fed into the next printer, where all of the page twos are printed, also at 17 per second. Some brain inside the printer manages to read the coding on each page and grab the correct page two on the fly, so that only Charles Fishman's page two gets printed behind Charles Fishman's page one. The printing process is so fast and so intense that the accumulating stack of statements is warm to the touch.

Scott Arnett is the day-shift work leader in the print room. He has a 401(k), and he puts 7% in and takes the 5% match from Fidelity. He prints 401(k) statements for a living. These days, when people find that out, "they say, 'Wow! What can you do about the numbers on my statement?'"

Couldn't we all use a little help from Scott Arnett before our statements leave Covington? I sure could. In July of this year, I sent $874 to my 401(k) account. My employer sent another $291. Total cash deposited with Fidelity: $1,165. In that same month, though, the investments in my 401(k) account dropped in value $1,289. So despite sending more than $1,100 to my 401(k), I had less on July 31 than on July 1 -- $124 less.

It would be hard to imagine a more efficient means of making money evaporate. I think of it as my Amazing, Disappearing 401(k). And that is the real investment story of 2002 (and of 2001 as well). Oversold IPOs, Wall Street firms riddled with conflicts of interest, and CEOs with overly generous retirement packages -- those are just so many headlines. The 401(k) is personal. You don't have to be an employee of Enron or WorldCom to feel as if your 401(k) account was its own miniature version of the "market bubble" and that someone has pricked it, so that even though you continue to pump money in, that money is leaking out.

If there is a half-joking, half-anxious symbol of the state of personal finance in America in 2002, it is the unopened 401(k) statement. My best friend has two degrees from Harvard, his wife works for a brokerage firm, and their statements sit stacked up, still sealed. "I can't look," he says.