U.S. Sen. Steve Daines (R-MT) has introduced bipartisan legislation that would allow Americans to better manage their retirement accounts after they have changed jobs.
The Retirement Savings Lost and Found Act of 2018, would modernize the retirement system to increase portability of and access to retirement savings, and for other purposes, according to a summary provided March 1 by Daines’ office.
“Montanans should not have to worry about losing their hard-earned dollars when they change jobs,” said Sen. Daines, who introduced the bill last week with U.S. Sen. Elizabeth Warren (D-MA). “This bipartisan bill will empower individuals to take control of their retirement future.”
With Americans holding larger numbers of small accounts, they increasingly lose billions of dollars annually in savings due to cash-outs, unnecessary fees and the costs associated with missing accounts, according to Daines’ office. The U.S. Government Accountability Office also noted in a 2014 report that many Americans don’t provide instructions to their employers about how to handle their retirement accounts when they leave a job.
If enacted, the Retirement Savings Lost and Found Act would direct the Social Security Commissioner and the Secretary of the U.S. Treasury to cooperatively establish an online mechanism known as the Retirement Savings Lost and Found that would be managed by a separate director set up under the act, according to the text of the bill. This would allow people to search for information on contacting the plan administrator of any employer-sponsored retirement accounts they have or are a beneficiary of and enable the online site’s director to assist them with other tasks, according to a summary provided by Daines’ office.
“Everyone should be able to build financial security and retire with dignity — yet millions of Americans are losing critical savings when they move between jobs. This bipartisan bill upgrades our retirement system to make it easier for Americans to keep the retirement savings they’ve worked for and earned and easier for employers to connect their former employees with the accounts they have left behind,” said Sen. Warren.
Among other provisions, the Retirement Savings Lost and Found Act would permit employers to invest abandoned accounts into target date funds rather than money-market funds, which GAO has projected will have a better 30-year growth rate compared to a money market, and details how employers and plan administrators can support former employees in locating their missing plans.