Sens. Elizabeth Warren, D-Mass., and Steve Daines, R-Mont., reintroduced in early July the Retirement Savings and Lost and Found Act to create a national online list of retirement accounts that have been left at an account holder’s former employer.
The database, which Warren and Daines first floated four years ago, uses the data employers are already required to report to the Treasury Department to create an online lost and found for Americans’ retirement accounts.
According to Warren, “The investment management company TIAA estimated that 30% of employees — tens of millions of Americans — have 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.”
Warren and Daines state that workers today switch jobs at much higher rates than their older counterparts.
The median job tenure for workers between 25 and 34 is less than three years, the lawmakers state, so workers could accumulate many different employer-sponsored retirement accounts throughout their working careers.
These workers may leave behind retirement accounts with small balances, which can decline rapidly in value from fees.
Between 2004 and 2014, “separated employees left more than 16 million accounts of $5,000 or less in workplace plans, with an aggregate value of $8.5 billion,” the senators said.
An estimated more than $100 billion of retirement savings are unclaimed.
The bill also requires plan sponsors to send lost, uncashed checks of less than $1,000 to the Treasury so that individuals can locate this money and continue to save for their retirement.