Seeking to curb the number of missing participants, a bipartisan bill to create a national online lost-and-found database for retirement accounts has been introduced in both chambers of Congress.
Sens. Elizabeth Warren, D-Mass., and Steve Daines, R-Mont., reintroduced the Retirement Savings Lost and Found Act on July 1 in the Senate. Reps. Suzanne Bonamici,, D-Ore., and Jim Banks, R-Ind., did the same in the House.
The bill, which Ms. Warren and Mr. Daines first introduced in 2016, would use data that employers are already required to report to create the database and would require plan sponsors to send lost, uncashed checks of less than $1,000 to the Department of Treasury so that individuals can locate their money. Moreover, the bill, which is supported by the Pension Rights Center, American Benefits Council, the ERISA Industry Committee and AARP, makes it easier for plan sponsors to move small accounts into age-appropriate target-date funds, according to a news release.
"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," said Lynn Dudley, senior vice president of global retirement and compensation policy at the American Benefits Council, in the news release.
The lawmakers pointed to a 2017 TIAA-CREF survey that estimated 30% of employees left a retirement account at their previous employer, including 43% of Generation X and 35% of millennials. Also, from 2004 to 2013, there was $8.5 billion sitting in lost retirement plans with balances of $5,000 or less, according to a 2014 Government Accountability Office report noted in the news release.
"Millions of Americans lose thousands in savings each year because of lost retirement plans from previous employers and other roadblocks to tracking multiple accounts," Ms. Warren said in the news release. "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."