Looking for lost retirement benefits?
Every year thousands of individuals arrive at retirement and are unable to find the pension, 401(k), or other benefits they have earned. Most often that is because the company they worked for years before has moved to a new location, changed its name, or merged with another company. The individuals are unable to find their old employers. The problem of “lost plans” has become more acute in recent years as business re-organizations have become more common.
A related problem arises when an employer is ready to pay retirement benefits to former employees who have reached retirement age and cannot find them. This typically happens because the former employees changed their names or addresses after leaving the retirement plans years before. When employers cannot find their former employees, they refer to them as “missing participants.”
Employers with active plans may, but are not required to, “cash out” small accounts of $5,000 or less after an employee has terminated employment. Another name for this practice is “forced transfer.” Generally, plans cannot pay out benefits unless an employee gives consent. A “forced transfer” is an exception to that rule. These transfers are most common in 401(k) plans. The rules of the plan must permit a forced transfer.
If an employer cannot find a former employee, and the account balance is more than $1,000 but less than $5,000 Labor Department rules require that the employer put the money into an IRA in the employee’s name. If the account balance is $1,000 or less, the money can be transferred into an IRA or a check may be sent to the employee.
Blogs & Newsletters
01/18/23
By Karen Friedman The Pension Rights Center (PRC) applauds the recent inclusion of several key consumer provisions in the Setting Every Community up for Retirement Enhancement Act (better known as SECURE 2.0), a retirement legislative package that was passed as part of the Omnibus spending legislation, which President Biden signed into law on December 29th. […]
Comments & Letters
08/11/22
The Pension Rights Center submitted comments to the IRS requesting the agency to include in its Priority Guidance Plan several items to better protect consumers, including: (a) directing plans to provide former employees who leave before retirement with a single complete statement of their earned benefits ; (b) asking the agency to rethink its position on allowing plans […]
PRC In the News
07/25/22|U.S. News & World Report
During the frenzy of leaving behind an old job and getting acclimated to a new position, rolling over your 401(k) plan isn’t always your first priority. Some people even lose track of a 401(k) plan at a former employer. Here’s what to do if you’re trying to find funds held in a previous employer’s 401(k) […]
PRC In the News
05/31/22|Delaware State News
When Sam Semilia toted up his retirement finances, he was pretty sure that he was due a pension from his time working as a steam engineer for the Diamond Crystal salt company four decades before.
Comments & Letters
03/29/22
PRC sent a letter to Chairman Neal and Ranking Member Brady of the House Ways and Means Committee in support of specific provisions of the Securing a Strong Retirement Act of 2022, including those related to recoupment and the Retirement Savings Lost and Found.
Blogs & Newsletters
07/16/21
By Emily Gilbert Here at PRC, we often hear from people who worked for a company that has since moved, been bought, or gone out of business, and they cannot find their retirement plan. The good news is that Congress seems to be getting closer to addressing this issue. In May of 2021, Senators Elizabeth […]
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