The following is a media release from Sen. Elizabeth Warren’s office. She was elected by voters in the Commonwealth of Massachusetts to serve the state in Washington DC in the US Senate. She is a Democrat.
WASHINGTON DC – United States Senators Elizabeth Warren (D-Mass.) and Steve Daines (R-Mont.) on July 1, re-introduced the bipartisan Retirement Savings Lost and Found Act to modernize the retirement system to protect Americans’ savings by creating a national, online “lost and found” for Americans to track their retirement accounts as they move between jobs.
Representatives Suzanne Bonamici (D-Ore.) and Jim Banks (R-IN) have introduced the bill in the House of Representatives.
“Millions of Americans lose thousands in savings each year because of lost retirement plans from previous employers and other roadblocks to tracking multiple accounts,” said Senator Warren. “Our bipartisan Retirement Savings Lost and Found Act of 2020 is a common-sense step we can take now to help hard-working Americans build a little more security and retire with the dignity they deserve.”
“This bipartisan bill will ensure that Montanans are able to keep their hard-earned dollars towards retirement when changing jobs,” Daines said. “This is about giving Montanans more control over their future as they save towards retirement.”
“I’m glad to partner with Senator Warren, Senator Daines, and Rep. Banks to help working families retire with dignity,” Congresswoman Bonamici said. “Our bipartisan, bicameral Retirement Savings Lost and Found Act gives workers the tools they need to keep track of their retirement savings when they move from job to job. This is even more important now as more workers face unstable employment and reduced benefits because of COVID-19. Also, young workers, Black workers, and workers of color face additional employment barriers and job discrimination that make them more likely to change jobs. With this legislation, we can take a simple step that will help all workers hold onto their hard-earned savings in a changing job market.”
“In the last ten years, 25 million Americans lost access to one of their retirement accounts in the process of changing jobs,” Congressman Banks said. “Too often, this means delayed retirement or financial tragedy for hard-working families. Our bill offers a bipartisan solution by giving them necessary tools to track their savings when they change employers.”
As employers have shifted from defined benefit pensions to individualized retirement plans such as 401(k)s, workers have become responsible for tracking, managing, and consolidating retirement accounts as they move from job to job, which is not always easy.
The investment management company TIAA estimated that 30% of employees—tens of millions of Americans—left a retirement account at their previous employer, including 43% of Gen Xers and 35% of Gen Yers. And according to the Government Accountability Office, millions more have left two or more accounts behind.
Between 2004 and 2013, there was a total of $8.5 billion sitting in lost retirement plans with just $5,000 or less in them.
This problem is only expected to grow in the coming years as young workers switch jobs at much higher rates than their older counterparts — the median job tenure for workers between ages 25 and 34 is less than 3 years.
Americans are already an estimated $7.7 trillion short on what they need for their retirement, and some are now relying on their retirement savings to help manage income loss or cover expenses during the current recession.
The bipartisan Retirement Savings Lost and Found Act of 2020:
- Creates a national lost and found for retirement accounts. It uses data employers are already required to report to the Treasury Department to create a national, online, lost and found for Americans’ retirement accounts. This means that with the click of a button, any worker can locate all of their former employer-sponsored retirement accounts. No more lost accounts—ever.
- Maximizes investment earnings. The act also makes it easier for plan sponsors to move small accounts into age-appropriate target-date funds so that workers can maximize their investment returns.
- Reinvests small cashed-out accounts. Requires plan sponsors to send lost, uncashed checks of less than $1,000 to Treasury so that individuals can locate this money and continue to save for their retirement.
The legislation is supported by the Pension Rights Center, American Benefits Council, the ERISA Industry Committee, and the AARP.
“The Pension Rights Center is thrilled that Senators Warren and Daines are introducing the new “Retirement Savings Lost and Found Act” to set up a registry to help retirees find their pension money when their former employers have moved, changed names or combined with other employers. This is one of the biggest issues that we and pension counselors across the country see, and we’re delighted that this problem will finally get solved. This will help millions of people who have earned their pensions – but can’t find them.” — PRC’s Executive Vice President and Policy Director, Karen Friedman
“We applaud Senators Warren and Daines and Congresswoman Bonamici and Congressman Banks for introducing the Retirement Savings Lost & Found Act, which will help employers ensure that workers receive the retirement benefits that they have earned. ERIC member companies maintain retirement plans with the goal of workers actually receiving these benefits. Therefore, ERIC has worked with Congress and the Department of Labor on the issue of missing participants for several years and support this effort to resolve the missing participant problem.” — Aliya Robinson, Senior Vice President of Retirement and Compensation Policy, The ERISA Industry Committee
“The American Benefits Council is pleased to support the Retirement Savings Lost and Found Act. The legislation, which includes a data registry and direction to the governing regulatory agencies regarding “missing” plan participants, is an important step forward in helping individuals reunite with their retirement benefits and providing employers with much-needed guidance on their fiduciary responsibilities relating to missing participants.” — Lynn Dudley, Senior Vice President Global Retirement and Compensation Policy, American Benefits Council
Photo courtesy of the government