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When it comes to personal finances, few things are as important as saving for retirement. Unfortunately, many Americans are behind on their saving goals – and some have abandoned their retirement accounts altogether. Research from Capitalize found that as of May 2023, there were roughly 29 million left-behind or forgotten 401(k) accounts holding approximately $1.65 trillion in assets.
That figure represents about one-quarter of all 401(k) plan assets — and the U.S. government wants to do something about it.
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Last month, the Department of Labor’s Employee Benefits Security Administration (EBSA) issued a notice requesting information from retirement plan administrators that will let the agency begin filling in the Retirement Savings Lost and Found database, an online search tool that aims to help workers locate lost retirement savings they earned.
The database was created as part of the SECURE 2.0 Act as a way to help 401(k) participants and beneficiaries find money they left behind. The database started collecting information from plan administrators in November 2024 and is expected to launch by Dec. 29, 2024. When it does, Americans will be able to input their information and conduct a search to find missing accounts.
The government has faced some challenges in gathering data, the AP reported. But EBSA officials sound hopeful they can build a comprehensive database with the cooperation of plan administrators.
According to a Labor Department press release, the EBSA needs retirement plan administrators, recordkeepers and other service providers to “work together to voluntarily provide the information” as a first step toward making the database available to the public.
Lost retirement savings happen because pension plans, 401(k)s and other retirement plans sometimes lose track of participants who are owed benefits, known as “missing participants.” There are a number of reasons participants go missing, including incomplete recordkeeping, workers changing jobs and workers losing track of their retirement plans after ex-employers merge or go out of business.
“Our goal … is to make sure that workers and their beneficiaries receive all the retirement benefits they earned and were promised through their working careers so that they can look forward to a secure and enjoyable retirement,” Assistant Secretary for Employee Benefits Security Lisa M. Gomez said in a statement. “The Retirement Savings Lost and Found database will be another tool to help plans carry out this responsibility.”
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Since 2017, enforcement efforts have recovered more than $7 billion in retirement benefits paid directly to missing participants and beneficiaries, according to the Labor Department.
But the department has run into problems gathering data due to concerns over confidentiality, HR Morning reported. The IRS has been reluctant to share information with the Labor Department. And at least one industry group, the American Benefits Council, has voiced concern about sharing employees’ personal information on the database unless it’s required by law.
For now, there are a few ways you can track down lost benefits before the database gets up and running. The AP recommends the following:
- Contact former employers if you think you might have had a 401(k) at an old job.
- Contact the EBSA directly to help you reclaim lost funds.
- Search for abandoned plans using the Department of Labor’s Abandoned Plan database, which can help you find terminated plans from companies.
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