The U.S. Department of Labor announced final rules that allow financial institutions to take charge of abandoned 401(k) plans.
Plan sponsors abandon an average of 1,650 401(k) plans covering 33,000 workers each year, the DOL estimates.
The new rules will enable financial institutions holding assets of abandoned 401(k) plans to give workers access to their funds, the department says. Until the rules were issued, the DOL dealt with such plans case by case, often supervised by the courts. The final rules should eliminate the need for costlier court approvals and allow workers to gain access to their benefits sooner, the DOL says.
The rules, which become effective May 22, provide standards for determining when a plan is abandoned and establish a process for winding up the affairs of the plan and paying out benefits. They can be found online at Document Link