How to find old retirement plan accounts
By Tom McDavitt
The average Baby Boomer changes jobs about 10 times before his or her early 40s, and that number is growing for younger people entering the workforce today. A large percentage of these people leave their retirement plans with the former company when they depart. Sometimes, they forget about them; sometimes, the company closes or has merged and the plan is terminated without the assets being forwarded to ex-employees. Either way, the money is usually still available to you if you do your homework.
Depending on the type of plan your money was in, there are several steps you can take to try and track down its current whereabouts. If the company had a pension plan, you can contact the Pension Benefit Guaranty Corporation (PBGC) at www.PBGC.gov or 1-800-400-7242 to run a free search. If you find your plan on the site, you can then file a claim to retrieve it. For a former plan that was a 401k account, they may be able to help you at the PBGC, as well. Otherwise, you might want to try the National Registry of Unclaimed Retirement Benefits (NRURB). The NRURB is also a complimentary service that can be found at www.unclaimedretirementbenefits.com. The service can put you in contact with the former employer so that you can claim your benefits.
As an example, a client of our firm assumed her employer plan dating back to the 1980s, with an employer that had been merged several times over the years, was long gone. We were able to use the resources above to uncover a balance that was now in the tens of thousands of dollars. Needless to say, she was thrilled when we walked her through the recovery process to reclaim that account.
An important take-away from this: Even if you don’t have any unaccounted for accounts as we speak, it is wise to consolidate your accounts when you change employers.
There are no taxes or penalties if you do a direct transfer. Moving the assets to your new employer’s plan is very easy to do. As a matter of fact, many retirement plan providers have a dedicated service team to help you through the process. You can contact your plan provider for information on what services are offered.
If your new employer does not offer a plan or does not allow rollovers, it would be prudent to move the assets to an IRA. If you have an existing IRA, you can usually enlist the aid of your custodian to help you with the rollover or transfer. If you don’t have an IRA, you can open one at just about any brokerage firm, mutual fund family, bank or insurance company.
Tom McDavitt, located at 102 Shore Drive, Suite 400, Worcester, MA 01605, is a registered representative and investment adviser representative and offers securities and advisory services through Commonwealth Financial Network, member FINRA/SIPC, a registered investment adviser, and can be reached at (508) 852-6222