It is common in the United States for workers not to remember to withdraw their money from a previous job’s retirement plan. Different studies indicate that this situation accumulates billions of dollars annually.
We will try to explain how to proceed to avoid losing or forgetting these rights and the corresponding money that remains forgotten in retirement plans.
Don’t change jobs without thoroughly reviewing the status of the Retirement Plan
Although this may seem all too obvious, on many occasions, swept up in the job change situation, we may forget to communicate with the company we are leaving and thoroughly review the status of the retirement plan.
That happens especially in jobs where we have not been there for very long. Generally, if we’ve been in employment for many years and the retirement plan has been vested, we’re not going to forget about it. However, no matter how low the amount accumulated, it is money that belongs to us and to which we are entitled.
When communicating with the company, we should consult the status of these contributions. Generally, it will be the human resources departments themselves that have account records. When these have been transferred to an IRA, the company must provide the corresponding data on the destination of these funds.
If the money is still held in a direct company retirement plan, requesting withdrawal forms to access the corresponding amount is possible.
Even when it is not feasible to communicate with the company (let’s imagine that it has disappeared), it is possible to access previous account statements. These are statements of account in which the financial institutions house the plan funds they regularly issue. These financial institutions make it possible to locate one’s plan.
How to inquire about your retirement plans
A very effective way to access information from the company you have worked for is to go to the U.S. Department of Labor’s (DOL) online platform.
From this platform, you can try to locate the company’s Form 5500. That is the tax return that is filed for the retirement plan. If you find this form, you can contact the responsible party to make the necessary inquiries.
However, there are other platforms from which it is possible to make complementary queries that can help. These are some of the main ones:
- The National Registry of Unclaimed Retirement Benefits platform
- The DOL’s list of abandoned retirement plans
- PBGC’s Participant Locator program
We can obtain different types of information through these resources. In the case of the National Registry, you can search using your Social Security number to see if there are any outstanding retirement accounts from an employer.
In the case of the DOL listing, through a search engine, you can check whether the retirement plan has been terminated or not. If it has ended, it informs you of the person responsible for finishing the program.
Finally, in the case of the PBGC, there is a program that helps transfer plans of missing participants to the PBGC itself until the participant appears or until the methods can issue the corresponding information. The PBGC has a program that helps transfer missing participants to the PBGC itself until the participant turns up or until the plans can allocate the related information.
On the other hand, it is always important to contact someone who can refer you to the current situation of the former company where you worked—for example, former co-workers, or even employers who have already left their partner status, etc. Generally, companies will provide all this information in a friendly manner. Complex situations can arise; for example, your former company was acquired by another company or merged with another company.
Two preventive measures
Although one can implement different measures to recover forgotten retirement plans, the truth is that it is best to take some precautions so that this does not happen.
The first of these is not to put off the distribution of benefits from your retirement plan until later when you change jobs. Immediately, one of the things you should do when you change jobs is to review the status of your retirement plan and transfer it to your new employer’s plan or an individual retirement account the vested benefits.
Another important aspect is that you do not change the contact information of your former employers. Remember that if you change your contact address, your old employer has no reason to know your new address if you did not provide it to them. That can be a breakdown in communication that can affect your retirement plan status.