How to help employees find their lost retirement accounts

Sometimes, things get lost in the shuffle. When that shuffle is a move to a different employer and those things are retirement funds, that can be a major problem.

Anyone who left an employer without rolling over their old 401(k) or pensions or IRAs could be missing out on a great deal of hard-earned money. Amid all the paperwork and adjustments involved with switching employers, it’s easy for something like the proper handling of a 401(k) or pension to fall through the cracks.

But there is hope! How can financial professionals help employees find their lost retirement accounts? There are a few avenues to explore.

What happens when retirement accounts are lost?

Retirement accounts can go missing for various reasons, including the account holder changing jobs and not rolling over funds to their new employer’s plan, or even their last employer going out of business and all administrative aspects seemingly falling off the face of the Earth.

The good news is, when an employee leaves a retirement account behind, it typically still exists and the funds remain available to their rightful owner. While nothing in life is a guarantee, it’s almost certain that no one will reach out proactively and tell the account owner that money is there waiting for them, so they’ll have to find it themselves. That’s where you can lend a helping hand to get those funds where they belong.

Locating unclaimed accounts and benefits

Before embarking on a journey through (cyber)space and time, your clients or plan participants will have some homework to do. Ask them to gather any information they have about their previous plan and/or previous employer who offered it. Find any paperwork, phone numbers, names, and so on. Whatever they can find can be helpful.

Contact previous employers

Encourage your clients or plan participants to call their former employer and speak with HR to see if they can find information that way. If the employer isn’t able to provide them with specifics, they may be able to provide other important information, such as phone numbers, email addresses or websites, to further guide them.

Search for retirement accounts online

If they haven’t had any luck by contacting past employers, online resources are available to help track down those missing retirement benefit accounts.

The Employee Benefits Security Administration has a website where people can search for abandoned plans by the name of the plan, if available, and the name of the previous employer.

If it’s easier to search by the individual employee’s name, the National Registry of Unclaimed Retirement Benefits might have information about outstanding retirement accounts that an employee hasn’t claimed, so conducting a search there could yield results. Be sure to read up on their FAQs prior to using their services.

Likewise, if the unclaimed account was a pension, the Pension Benefit Guaranty Corporation offers plenty of resources for locating these accounts. Despite what its name implies, this is a United States government agency, which has protected retirement security for millions of Americans since 1974.¹

Actions to take once accounts are found

It can make sense to get those newly discovered funds rolled over into their current retirement account so everything can be in one easy-to-reach place. (This assumes that costs and investment options are considered in this decision.)  Arrangements will have to be made with the old account provider and current account provider to ensure proper protocols and avoid potential penalties down the line if transfers aren’t done correctly in accordance with all regulations.

This is the part of the process that may be trickiest for your client or plan participants, so be sure to offer guidance and do some of the heavy lifting for them to help see that all funds are transferred properly.

Finally, if you’ve located lost funds, it’s certainly an accomplishment, so you might want to take a moment for some celebration!

SOURCE
¹ Pension Benefit Guaranty Corporation, About PBGC, Undated

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