The Hill: Warren, Daines offer retirement savings bill

Sens. Elizabeth Warren (D-Mass.) and Steve Daines (R-Mont.) on Tuesday introduced legislation to protect the retirement savings of people who change jobs.

The legislation would create a national, online “lost and found” for retirement accounts so that workers can easily locate accounts sponsored by former employers. The lost and found would use data that employers already have to report to the Treasury Department.

“Our country faces a retirement crisis, and it’s important that all workers have a real chance to build retirement security. But today, millions of Americans are losing critical savings when they move between jobs,” Warren said in a news release. “This bipartisan bill will help protect the retirement savings employees have earned.”

When workers with individualized retirement plans such as 401(k)s move from job to job, they are responsible for managing and consolidating their accounts. However, people often leave their accounts behind at previous employers because it is difficult to move them, and small accounts are often lost or neglected, according to a fact sheet on the bill.
In addition to creating the lost and found, the bill would make it easier for employers to invest abandoned accounts into target-date accounts rather than money-market fund accounts so that the accounts will grow over the long-run. It also allows neglected accounts with balances of less than $1,000 to be transfered to Treasury so that people can find their money.
“When an employee leaves a job, its often hard for them to keep track of their retirement accounts during these transitional times,” Daines said. “This is a commonsense approach that will empower individuals to take control of their retirement future.”

The bill is backed by the AARP and the Pension Rights Center.

This is not the first bipartisan bill that Warren has introduced recently about retirement savings. Earlier this month, Warren and Sen. Mike Lee (R-Utah) offered a bill designed to help graduate students start saving for their retirement.