Alice Morgan Photo Illustration for Getty Images
The Key Takeaways
- The Labor Department has launched a 'Retirement Savings Lost and Found Database' to help people find their old 401(k)s.
- According to an expert, the database relies upon limited data which could make it less valuable to users.
- If you find an old retirement plan, it may still be necessary for individuals to speak to the administrator of that plan in order to verify whether or not their benefits still exist.
There may be an easy way to find old retirement plans that you forgot about with previous employers.
The Department of Labor launched the ‘Retirement Savings Lost and Found Database” to assist people in finding their old pensions and retirement savings.
According to Capitalize (a fintech firm), there will be over 29 million forgotten 401k accounts in the U.S. by May 2023. These accounts have assets worth $1.6 trillion. SECURE 1.0, the retirement law of 2022, mandated that this service be created.
The new database allows individuals to search for workplace retirement plans—like defined pension plans and 401(k)s—that they held with previous employers. Some people say it is of little use for retirees.
What can this database do and how do you access it?
The database is only useful to people who worked in the private sector, took part in workplace retirement plans and were eligible for benefits from that employer.
You will first need to create an online account and verify your identity by providing certain documents, including a valid driver’s license or Social Security number. To begin, you will have to register online, verifying your identity through your Social Security number and a driver’s permit.
If someone has only worked for employers in the public sector—such as city, state, or federal agencies, they may not be eligible to use the service. This is because the database doesn't provide information on retirement plans sponsored by the government or religious organizations.
If you're worried about your data privacy, you can also opt out of having your data included in the service.
What The 401(k) Lost and Found Can't Do
The database itself is not perfect.
Michael Kreps is the Retirement Services Chairman at Groom Law Group. He said that this database might not be useful because the DOL’s data, which it has collected and continues to collect so far, are flawed.
"If you've populated a database with stale data, then [it's] garbage in, garbage out—you're gonna get stale information back," Kreps said.
This database, for instance, does not show whether a retirement benefit has been paid, rolled-over, or converted into annuities. This means that individuals must call the plan administrator, or company managing the retirement plan in order to find out if their benefits remain.
"It's not the end of the world for a participant to search the database, call, and find a plan," said Kreps. "But it is kind of confusing and misleading to people to say, 'hey, you might have a benefit with this employer you worked at 20 years ago.'"
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