The chances of losing your benefits because your employer runs into financial problems would seem pretty slim.

But the repercussions if it does happen are so great to your personal finances, it's an issue worth paying attention to if there's any inkling of trouble at your company.

Consider the case of Diversified Corporate Resources Inc., a Dallas-based human-resources and employment-services company.

In its most recent quarterly filing with the Securities and Exchange Commission, dated at the end of March, the financially distressed firm said it was behind in its obligations to its 401(k) and its self-funded health insurance plan for employees.

"The company has not made all of its payments to its 401(k) plan on a timely basis, which could result in penalties due," the firm's report said.

"At March 31, 2006, the company had not forwarded approximately $316,000 to the administrator of the 401(k). To avoid or reduce any potential penalties, the company may make additional contributions for employees for investment losses, if any, they may have suffered as a result of the late payments."

On March 1, DCRI had suspended adding new 401(k) participants or continuing deductions on current participants.

Unpaid bills
On its health insurance plan, the company said it "has not made all medical payments on a timely basis, which could result in penalties due or lost discounts from medical providers under our medical plan."

"At March 31, 2006, the company had medical obligation due of approximately $616,000," the SEC filing said. "The plan is unfunded and any amounts due are not secured in the event of a bankruptcy filing."

DCRI has delayed filing its quarterly report for this year's second quarter and has warned that it could go out of business if it doesn't receive additional funds to sustain its operations. It also said in March that it owed payroll taxes of $3.2 million plus penalties and interest and hadn't been paying vendors on time.

The company said its financial troubles started with the economic slowdown in 2000.

"The consequences of some of these tactics have or may result in penalties and/or fines for late payments or may involve legal actions against the Company," the filing said. "However, management of the Company believed that these steps were necessary at the time to maintain the Company while it sought to correct its cash flow issues."

Untouchable 401(k)
Former employees said they were shocked to discover that their contributions to the plans weren't being put to work for them.

"They gave stock options to cover their butts for the 401(k), and the stock options they gave them were worthless," said Jessica Jones, a former recruiter for the company. "I had no money, because they bounced my paycheck."

She said other employees warned her not to participate in the 401(k) because the company wasn't forwarding their contributions to the plan. The company matched employee contributions with company stock.

"I never contributed to the 401(k), because I knew it was crap," said Ms. Jones, who joined the company in August 2005 and resigned in March. "It was a known fact by the time I got there not to touch the 401(k)."

J. Michael Moore, DCRI chief executive since 1993, declined to comment.

DCRI is under investigation by the Department of Labor for failing to forward employee contributions to the 401(k) and health insurance plan.

The department told the company in a letter dated Feb. 14 to tell employees what was happening. Prior to the letter, the company hadn't informed employees about the problems with the plans, former workers said.

"Under separate correspondence, the employer should inform the participants and beneficiaries that the 401(k) plan will be frozen and that there will be no further employee contributions, loan payments and/or employee contributions remitted to the 401(k) plan," Labor Department officials wrote to DCRI.

In letters dated March 8, the company informed employees of the situation.

The letters said the company was working on a "time schedule" to make good on both obligations, but former employees said they're still owed thousands of dollars in 401(k) contributions, in lost interest that the funds would have received and in medical bills.

Labor Department officials said they don't comment on ongoing investigations.

'It's all on us'
The impact on current and former employees has been profound.

"It's all on us," said Ms. Jones, who lives in Garland. "Right now, I'm in the process of fighting, stating these are not my bills. These belong to MAGIC."

MAGIC, which stands for Management Alliance Group of Independent Companies, is the primary subsidiary of DCRI.

The company describes MAGIC as "one of the country's premier providers of Human Capital Solutions, which includes middle management recruitment, executive search as well as contract placement, both short and long term."

Ms. Jones said she owes $700 to her primary care physician, $2,300 to her allergist and $2,000 to her dentist.

"I haven't been able to go to doctors I've gone to for years," she said. "I owe them so much money that they want their money first before they see me again. I've had to find all new doctors."

She said she doesn't expect the company to pay her medical bills, nor does she expect the company to pay her the estimated $2,500 in commissions she says it owes her.

"No," Ms. Jones said. "It's never coming back."

E-mail pyip@dallasnews.com