Unclaimed Retirement Benefits: Do you have money lost in old 401(k)s and pensions?
There has been a wave of reporting over the last few years around the vast sums of money in unclaimed accounts in the US. Millions of Americans have forgotten or are completely unaware of money in their name from government payouts, bank accounts, and stock sales. But, by far, the largest numbers are held in unclaimed 401(k) and pension plans from previous employers.
The nonprofit National Association of Unclaimed Property Administrators estimates that state and government treasuries are sitting on an excess of $33 billion in unclaimed assets. It seems like a good time for a reminder on how and where you might track down long-lost funded pensions or 401(k)s in your name.
As we move between jobs, many people miss the fact that we may have been contributing to a 401(k) plan at our previous employer without even knowing it. Many employers will automatically enroll their employees in their 401(k) plan at a low contribution level. Even if you didn’t fill out the paperwork or declined to auto-enroll, you may have built up a vested 401(k) balance in your name. As we move between jobs and regions, such plans can be forgotten and left behind – still accruing value as time goes by.
If this might apply to you, the first/easiest step would be to contact the HR department at your previous employer directly to ask if they have an open balance in a 401(k) in your name. If you can’t find their contact information of if they’ve gone out of business, you can contact the Department of Labor’s Form 5500: https://www.efast.dol.gov/portal/app/disseminatePublic?execution=e1s1. The 5500 Form is a tax form that 401(k) plan administrators are required to file annually – but this form only dates back to 2009.
A third option is to search the National Registry of Unclaimed Retirement Benefits: https://www.unclaimedretirementbenefits.com/SSNSearch.aspx. This free service matches former employees with unclaimed benefits—requiring your social security number to make the search. If a match is found, the registry can provide contact information to claim your lost account.
If you ever worked a job that qualified you for a pension, you could have a guaranteed retirement income source waiting for you. You would have had to work a set number of years, usually five or more, at a previous company to be vested in a pension program. Historically pensions are attached to unionized workforces, remaining a key benefit for many public sector jobs today, though increasingly rare in the private sector.
The Pension Benefit Guaranty Corporation (PBGC) is a government agency that maintains and protects pension plans. If you worked for a company offering a pension, even if that company no longer exists, the pension may still be secured through the PBGC, searchable by your or employers name on the unclaimed pension page: https://www.pbgc.gov/search/unclaimed-pensions.
If you find a lost 401(k) in your name, I recommend moving that money into an active retirement savings account—whether that is a current 401(k) or an IRA—so that all your retirement plans are accounted for. Finding lost money for retirement is a great reason to jumpstart a more involved and comprehensive retirement savings plan.
If you are lucky enough to be able to claim a pension, you will be able to draw on those benefits once you hit retirement age. But keep in mind, depending on the length of time you spent with the pension-baring employer, your payout may be small, and an additional retirement savings plan will likely be needed.
Regardless of your situation with past/unclaimed accounts, I recommend contacting your current HR department at work or outside retirement specialist to begin a measured and clear-sighted approach to your retirement goals.