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A Federal Lost and Found for Retirement Accounts?

U.S. Senators Elizabeth Warren (D-Mass.) and Steve Daines (R-Mont.) have teamed up to introduce legislation that would create a federal lost and found designed to help stem leakage from retirement accounts.

According to its sponsors, the bill uses the data employers are already required to report to create a national online lost and found for Americans’ retirement accounts. The “Retirement Savings Lost and Found Act” also:

  • allows employers to more easily invest abandoned accounts into target date funds rather than money market funds; and

  • allows for “orphaned” funds with balances less than $1,000 to be transferred to Treasury securities, such as the myRA, so that balances earn a positive return.

The lost and found would be managed by a new “Office of the Retirement Savings Lost and Found” within the Treasury Department. The bill appropriates “such sums as may be necessary” to set up and run the office, provides for regulations implementing the program within six months of its enactment, and calls for the debut of the lost and found six months after that. A fact sheet about the bill is here.

Earlier this month Warren teamed up with Sen. Mike Lee (R-Utah) on a different piece of retirement legislation, the Graduate Student Savings Act of 2016.