Dude, where’s my 401(k)?

 

If you missed that 2000 stoner comedy Dude, Where’s My Car?, you had several chances recently to catch it on cable. But if you’re still not aware of this movie that was a modest box-office success but has managed to develop a cult following, let me raise your pop culture awareness.

Two potheads played by Ashton Kutcher and Seann William Scott wake up from a night of partying and can’t remember where they parked their car. And it occurred to me what if they woke up 40 years later and couldn’t find their 401(k) accounts from all the different employers for whom they worked. (Yea, yea, I know I should get a life outside ERISA!).

That’s a likely scenario for many employees who were never part of a defined benefit pension plan and participated only in defined contribution plans such as profit sharing and 401(k). In an economy in which workers change jobs frequently, employers go out of business, move or are acquired, it’s not unusual for them to lose track of former account balances.

The resources to find these lost defined contribution accounts are even more limited than for defined benefit plans. For these plans at least, the Pension Benefit Guaranty Corporation (PBBC) does have its Pension Search database, but it’s only useful to assist employees whose defined benefit pension plan the PBGC has taken over. The PBGC does, however, provide information on how to track down a lost pension from other sources in their publication, Finding a Lost Pension.

There are, however, at least two resources, however limited, that may help:

  1. The Social Security Administration which receives Schedule SSA information from the Department of Labor each year for terminated employees with vested benefits. However, the information is only as current as the date that the employer left his former employer.
  2. The National Registry of Unclaimed Retirement Benefits (NRURB), a database operated by the benefit distribution processing firm PenChecks. However, employers must take the initiative to register names of former employees who have left account balances in their retirement plan. There is currently approximately 50,000 such individuals in their database.

So what’s the solution? One to consider is the approach taken by the U.K. and Australia. Each country has a central registry for the purpose of helping people find lost pensions. You can read about this approach in the March/April 2002 issue of Contingencies magazine article, Retirees ISO Their Lost Pensions, written by David Blake of the Pensions Institute in London and John Turner of the American Association of Retired Persons (AARP).

The bottom line is that employees are on their own, and it’s time to address the matter. 

And by the way, if you did miss the movie that inspired this post, be patient. The sequel, Seriously Dude, Where’s My Car, is supposed to premiere next year.


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