In full transparency, 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.) reintroduced the bipartisan Retirement Savings Lost and Found Act of 2021 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.
“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 2021 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.”
“Montanans work hard to build their savings in preparation for a worry-free retirement-their efforts and savings should be secure,” Senator Daines said. “I’m glad to join my colleagues from both sides of the aisle in working to help Montana workers have more control over their futures. I urge Majority Leader Schumer to do what’s right and help get our bill passed and signed into law for Montanans.”
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.
The bipartisan Retirement Savings Lost and Found Act of 2021:
- Creates a national lost and found for retirement accounts. It uses data employers are already required to report 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 the Office of Retirement Savings Lost and Found 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, and the ERISA Industry Committee.
“The Pension Rights Center applauds Senators Warren and Daines for introducing legislation that will help retirees locate the pension and other retirement benefits they earned but cannot find because their former employers changed their names, addresses, or structure. Currently, thousands of individuals contact pension counseling projects and government agencies each year seeking help in finding their lost pensions. This important bill will close a critical and too-long-overlooked gap in our nation’s private retirement system,” said Karen Ferguson, President, Pension Rights Center
“The American Benefits Council is pleased to support the Retirement Savings Lost and Found Act. The provisions of the Retirement Savings Lost and Found Act could make important progress in addressing the problem created when individuals lose track of their retirement benefits at the time they change jobs, and the former employer is not able to locate the person,” said Lynn Dudley, Senior Vice President Global Retirement and Compensation Policy, American Benefits Council
Read the bill text here.