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‘Forgotten’ 401k Accounts Study Criticized By Fiduciary Professionals

Of Counsel Michelle Capezza was referenced in an article published by Fiduciary News analyzing forgotten 401K accounts. Michelle wrote, "Over the course of a career, it is not uncommon for today’s workers to participate in several employer sponsored 401k plans and to leave retirement accounts in those former employer plans after a job change."

She continued, "It is certainly possible for someone to forget that those accounts are still there, especially from an early employer plan, or whether a rollover was actually requested. In addition, plan administrators have long struggled to manage missing participants and uncashed distribution checks, an issue that often arises because plan participants do not keep their contact information up to date with the plan. But, plan participants that have terminated employment with a particular employer might also leave their retirement accounts in those former employer plans because they can gain access to the investment options in that plan at a reasonable price, or perhaps certain services, that might not be available in their current plan. Thus, it might be a useful diversification strategy to leave retirement accounts behind until a future date closer to retirement."


Fiduciary News