Q&A

'Lost' mutual fund shares Q. I own about 400 shares of a mutual fund that I have lost track of for the last ten years. They obviously lost track of me, as I have not received a statement in a very long time. The fund has undergone some name changes (it started as Winfield Investment Program). Could you tell me how I could begin to track down what, if anything, I still own of these shares?

Like many mutual funds, yours was acquired by another fund group several years ago, and it was merged into the Research Equity Fund in 1973, according to the Wiesenberger Investment Companies Service in New York, which keeps a list of fund name changes and mergers. Research Equity Fund is managed by Franklin Custodian Funds Inc., 155 Bovet Road, San Mateo, Calif. 94402.

If the broker who originally sold you the Winfield shares is no longer available, you can call Franklin Custodian Funds, collect, at (415) 570-3000. Ask for the shareholder services department. Someone there should be able to tell you whether there is any record of your shares and their current value.

The Investment Company Institute also has records of funds that have been acquired, changed their names, or gone out of business. The ICI's address is 1600 M Street, NW, Washington, D.C. 20036. 401(k) vs. IRA

Q. My employer is offering a 401(k) salary reduction plan for retirement savings. I already have an individual retirement account (IRA), so I'm not sure I need this new plan. Can you explain some of the differences?

The 401(k) plans date back to the Internal Revenue Act of 1978, well before the heyday of the IRA, but the 401(k) and the IRA each have their advantages, so you may want to take both.

Salary reduction plans must be started by an employer, and your investment choices are limited to the vehicles the employer selects. This usually means you can choose among a mutual fund, an annuity, and company stock. With an IRA, of course, you can choose from any of the hundreds of bank, brokerage, mutual fund, and other financial service products that are increasingly avilable.

There are things you can do with a 401(k), however, that you can't do with an IRA. At many companies, for example, you can borrow against it without tax penalty and usually at a lower rate than you might get from a bank or thrift.

Also, most employers will match your contribution up to a certain amount, say , with 50 cents to each of your dollars, up to 5 percent of salary. While both IRAs and 401(k)s earn interest free of federal taxes, some states will tax the earnings on IRAs, but not on a 401(k). The 401(k) also has higher annual contribution limits.

Finally, the 401(k) is eligible for more favorable tax treatment at retirement. Unlike an IRA, where withdrawals are taxed as ordinary income, 401 (k) withdrawals are eligible for 10-year forward averaging, which allow you to spread out the tax obligation over a 10-year period.

Even though they have a 401(k), many people like being able to manage some of their own retirement kitty, so they still have an IRA. You would not be giving up anything by adding a 401(k) and you would be gaining a great deal of flexibility and the ability to save even more for your retirement.