Back when the SECURE 2.0 Act was passed in 2022, it impacted a broad swath of the retirement savings landscape. Quietly tucked in there was a provision that garnered little attention but certainly piqued my interest. This interest stemmed from having worked with numerous clients as they’ve tried to track down old workplace retirement accounts, often frustratingly or even to no avail. This provision, championed by none other than Sen. Elizabeth Warren, mandated the creation of a 401(k) “lost and found” designed to alleviate the pain points in this process.
Now nearly three years later, this tool was quietly rolled out recently by the US Department of Labor – and we think you should know about it!
This new tool is designed to help you uncover forgotten workplace retirement assets, including defined benefit pension plans and get them reintegrated into your financial plan. Whether there’s a few hundred dollars or tens of thousands, the money is yours and should be under your control – invested in a way that aligns with your long-term financial plan.
Officially called the “Retirement Savings Lost and Found Database” (no cool acronym here),this tool is intended to help unlock more than a trillion dollars of unclaimed retirement savings that are currently unaccounted for – often due to job changes, company closures, or outdated contact information. While resources like the state’s “Unclaimed Property” website exist (and are worth exploring on their own), these existing resources don’t address retirement savings, thus necessitating this new tool.
How do you access it and what should you expect?
First, know that this tool will help you located old 401(k), 403(b), 401(a) and defined benefit pension plans linked to your Social Security number – so long as those plans were sponsored by private-sector employers or unions. This tool does not include IRAs (more on this below), government sponsored retirement plans (don’t get me going on the irony of this), or Social Security benefits.
Second, let’s look at how to gain access.
- Visit lostandfound.dol.gov
- Login with your LOGIN.GOV account (or create one if needed). This is the same account used for passport applications, TSA PreCheck, and other federal services. For first-time access to the Lost and Found, have ready the following:
- Legal first and last name
- Date of birth
- Social Security number
- Your mobile device
- Your current driver’s license
- Once logged in, the database will display any lost accounts or undrawn pensions linked to your Social Security number! (or clearly indicate none have been found)
- If any accounts are listed, reach out to us for assistance in gaining control of them (see below for your options).
Found some $$$, now what?
What if you do discover untold riches in the form of an old workplace retirement account or undrawn pension? You have four options, which we’ll briefly explain here.
- Cash it out. For defined contribution plans, if you’re under age 59-1/2, this will bring penalties (10%) and taxes. If you’re over 59-1/2, just the taxes apply. For pensions, contact us to understand distribution options and tax implications.
- Leave it where it is. Probably not the best option if you had previously lost track of it, but you have the right!
- Roll it to a current workplace retirement account, assuming the current plan permits incoming rollovers (most do). This option does not apply to pensions.
- Roll it to an IRA (Individual Retirement Account). As with option 3, this one does not apply to pensions.
Reach out to us if you want to explore the potential benefits and drawbacks of each option as they specifically apply to you.
While the odds are that you won’t find any lost treasures (I didn’t), this is certainly worth checking out. Every dollar counts toward your long-term financial goals, and we’re here to help you reintegrate any rediscovered savings or pensions into your plan.
A Special Note on Smaller Accounts
We noted above that this new Lost and Found tool does not include IRAs. This could be an issue for you – as workplace retirement account rules permit your employer to kick your account out of the 401(k) plan if the account value is below $7,000 (previously $5,000). When kicked out, the account is moved to an IRA in your name, which you then have to take control of. So, if the account left behind was small, it may not be in the old 401(k), meaning it may not show up in this database. If you think this may be the case for you, please reach out and we’ll do our best to help you find that account as well!