Senator Elizabeth Warren proposes bill to help workers track down old 401(k)s

Senator Elizabeth Warren proposes bill to help workers track down old 401(k)s
Legislators cite a recent TIAA study finding 30% of employees neglect accounts at previous employers when they switch jobs.
JUN 22, 2016
Employees don't just leave behind pens and pencils when they leave an employer. They also tend to forget their retirement savings, a habit targeted by a new bill. Sens. Elizabeth Warren, D-Mass., and Steve Daines, R-Mont., introduced the Retirement Savings Lost and Found Act Tuesday, a bill that would create a national online database of abandoned retirement plans constructed from data that employers already must report. “This means that with the click of a button, any worker can locate all of their former employer-sponsored retirement accounts,” states a fact sheet about the measure. “No more lost accounts — ever.” The bill is the second retirement-related measure Ms. Warren has introduced with a Republican recently. She said the latest bill is a way to address the country's “retirement crisis.” “Today, millions of Americans are losing critical savings when they move between jobs,” Ms. Warren said. “This bipartisan bill will help protect the retirement savings employees have earned.” The lawmakers expressed alarm that workers are not keeping track of the retirement funds they accumulate as they switch jobs. They cited a 2015 report by fund manager TIAA that found that 30% of employees neglect accounts at previous employers. A 2014 Government Accountability Office study said millions of employees have left two or more accounts behind. The trend will be exacerbated, the senators said, by the frequency with which young workers change jobs and the fact that auto-enrollment often launches retirement plans that employees don't know exist. “The proliferation of small accounts is costing Americans tens of billions of dollars every year in lost savings because of cash-outs and redundant fees, and that doesn't include lost savings from missing accounts,” the fact sheet states. “And this is at a time when Americans are already $7.7 trillion short on what they need for retirement.” Other provisions in the bill make it easier for employers to shift small “orphaned” accounts into target-date funds and allow funds with balances of less than $1,000 to be invested in Treasury securities.

Latest News

Private credit becoming 'big piece' of annuities, T. Rowe exec says
Private credit becoming 'big piece' of annuities, T. Rowe exec says

Goldman Sachs retirement survey finds 83% want guaranteed income, while the annuities providing that income increasingly hold private credit.

Zocks debuts Claude plugin with seven skills for financial advisors
Zocks debuts Claude plugin with seven skills for financial advisors

The AI meeting assistant's Advisor Intelligence plugin turns client conversation data into annual reviews, tax scans and attrition alerts.

Stifel settles massive $30 million complaint involving star broker’s sale of structured products
Stifel settles massive $30 million complaint involving star broker’s sale of structured products

Chuck Roberts and Stifel have been facing scrutiny due to sales of structured products and structured notes.

SEC floats CFP route to accredited investor status, fund rules refresh amid private market push
SEC floats CFP route to accredited investor status, fund rules refresh amid private market push

Among other updates, the proposals would let advisors to regulated funds earn performance fees and allow interval funds to offer monthly repurchases.

The Year Is 2046 and I’m a Financial Advisor 
The Year Is 2046 and I’m a Financial Advisor 

What will financial advice look like 20 years from now? Evan Vladem explores how AI may transform wealth management while reinforcing the enduring value of human guidance, trust, and empathy. 

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains