Two senators are trying to help workers locate retirement savings they may have forgotten when they switched jobs.
On Thursday, Sens. Elizabeth Warren, D-Mass., and Steve Daines, R-Mont., introduced the Retirement Savings Lost and Found Act, which would establish a national database of orphaned retirement accounts.
"This means that with a click of a button, any worker can locate all of his or her former employer-sponsored retirement accounts," a news release about the legislation states.
The lawmakers said that the lost-and-found registry would be populated with data that companies must already report.
The senators cited a 2015 survey by TIAA that showed that 30% of Americans have forgotten to take retirement savings with them when they depart employers.
"Everyone should be able to build financial security and retire with dignity — yet millions of Americans are losing critical savings when they move between jobs," Ms. Warren said in a statement.
In the same statement, Mr. Daines said: "This bipartisan bill will empower individuals to take control of their retirement future."
Laurie Wieder, vice president of qualified plans at Alliant Wealth Advisors, said that her employer clients try diligently to track down former workers who have accumulated retirement-plan savings but abandon them when they leave for another job. The search often comes up empty.
"They would appreciate any relief and specific guidance to make sure they're doing everything they can do to locate those participants," Ms. Wieder said. "I would hope there would be a more robust way to help these employers."
If a former employee leaves behind less than $1,000, an employer can cash out the retirement plan and send the person a check. If someone leaves between $1,000 and $5,000, it can be rolled over into an individual retirement account by the employer. Amounts of greater than $5,000 cannot be cashed or rolled out.
Under Ms. Warren and Mr. Daines' legislation, companies would be able more easily to invest abandoned accounts in target-date funds and put uncashed checks of less than $1,000 into Treasury securities.
The Plan Sponsor Council of America supports the bill and foresees more ideas being offered to address orphaned retirement accounts.
"We will monitor and evaluate [the bill] and expect to see other proposals/amendments — more auto-portability (or less), other data exchange models, higher cashout rates, and, yes, other default investment options," Steve McCaffrey, chairman of PSCA's legal and legislative committee, said in a statement.
The senators are re-introducing their bill after similar legislation failed to become law in the previous Congress. They're seeking support for the idea on the other side of the Capitol as well.
Mr. Daines "is hopeful a House companion will be introduced," spokeswoman Breanna Deutsch wrote in an email.