A government site for all your 401(k) data?

A government watchdog that wants everyone with a 401(k) plan to be able to see information on all their accounts in one place this week asked Congress to legislate a nationwide dashboard.

In a report released Tuesday, the Government Accountability Office pointed to a shortcoming in the 401(k) system that's also part of why it has been so successful – participants retain their retirement assets when moving from job to job. While that has helped serve the needs of an increasingly mobile workforce, it has resulted in people having multiple accounts that can be cumbersome to keep track of.

Creating a government-managed retirement plan dashboard would put the US in line with a handful of countries that help their residents keep track of savings, including Australia, Belgium, Denmark, the Netherlands, Norway, and Sweden, the GAO noted.

“All six countries use pension dashboards and other approaches to help plan participants track, manage, and consolidate their plan savings and reduce fees … [including] a centralized pension dashboard that allows participants to view their retirement savings securely online and at no charge,” the government organization wrote. “According to experts from the countries, the dashboards help participants keep track of their various workplace retirement accounts as they change jobs.”

Currently, the Department of Labor is tasked with building a retirement account "lost and found," which was a requirement of the SECURE 2.0 Act passed in 2022. Such a system would help address the ongoing problem of “missing” participants, particularly those with small account balances, whose assets often end up being escheated to individual states as unclaimed property.

“The Retirement Savings Lost and Found database may become a primary resource that can help resolve participants’ current challenge of not having a centralized way to help locate their lost accounts. However, the database will not allow participants to track information about all their multiple accounts, often held across different providers, in a single place,” the GAO stated.

Having easy access to information such as total assets and plan fees “can help participants make informed decisions, such as deciding to consolidate their accounts, which can help them minimize plan fees and prevent accounts from becoming lost or unclaimed.”

The retirement plan business might be on board for such a system, although none of the major 401(k) record keepers contacted by InvestmentNews would comment on the proposal. Although the financial services industry tends to fight government mandates, there have been discussions among 401(k) providers and others about how to share information.

In late 2019, a group of about 80 companies convened with the Spark Institute to talk about how closed blockchain could be applied to 401(k) data. The payroll providers, plan record keepers, advisors and asset managers were eager to pursue the creation of participant-data and plan-sponsor blockchains, but the Covid-19 pandemic derailed any progress on that, said Tim Rouse, executive director of the Spark Institute.

“This is where the blockchain would have worked perfectly. The industry was already starting to go down there. Unfortunately, Covid put it on the back burner,” Rouse said, adding that this would be a good time to resurrect that discussion.

With regard to support for a nationwide dashboard for plan participants, “I don’t think the industry would be opposed to it,” he said. “There was a lot of interest.”

Separately, retirement plan record keepers have been coordinating to establish a nationwide network that would allow automatic portability of 401(k) account assets for workers moving between jobs. That effort, the Portability Services Network, involves Retirement Clearinghouse, Fidelity Investments, Vanguard, Alight Solutions, Empower, and TIAA.