Investors who have been laid off or who have switched jobs may be in for a rude awakening when it comes to their 401(k). Not only has its value declined steeply, but the investment advisor may not honor redemptions in funds whose assets are tied up in any type of risky, illiquid investment, The Wall Street Journal reports.

Likewise, funds are holding back on securities lending in this market, which is also contributing to the increase in frozen redemption requests.

That was the case for one investor whose money was invested in the Principal U.S. Property Separate Account, which invests directly in commercial real estate properties and which has found it difficult to sell many of its holdings in this market. The fund is withholding $1.1 billion in redemptions, worth 26% of the fund’s total assets.

While the frozen redemptions are angering some investors, they don’t realize that there are sound reasons, concerning market illiquidity, behind them. As a spokeswoman for Principal Financial Group, which runs the Principal U.S. Property Separate Account, explained, “To sell property at inappropriately low price sin order to generate cash for a few would hurt the majority of investors and violate our fiduciary obligations.”

Nonetheless, making matters worse for those investors who want to access or switch their money in the fund, it continues to decline in value, losing 25% in the trailing 12 months ended April 30.

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