Rhode Island sheriffs' retirement account woes bring scrutiny to their state-run plan

A Rhode Island retirement plan for government employees is drawing criticism from members of the state's Division of Sheriffs.

Over the last 13 years, Jason Allaire, a captain with the Rhode Island Division of Sheriffs, had saved thousands of dollars in a state retirement plan created for public employees.

The account is a 401(a), a 401(k) equivalent for government workers, so he assumed it worked the same way: He could withdraw funds before he hit retirement age but would have to pay a penalty and taxes to do so.

Earlier this summer, with Allaire seeking to pull out some money to help his daughter pay for college, he got a shock. The company handling the account told him he couldn’t access the money until he stops working for the state.

“We cannot touch it, borrow against it or move it,” even in an emergency, he told NBC News. “This plan is pretty much holding us hostage.”

Allaire’s experience reflects the sad reality facing many older Americans. Saving for a prosperous retirement has never been harder, financial experts say, citing risky products, hidden investing costs, complex rules and undisclosed conflicts of interest at financial firms.