What We Know About Retirement Savings Left Behind at Old Jobs

Retirement savings are increasingly scattered across old employers' plans as workers change jobs without consolidating their accounts, according to a report attributed to Empower, the retirement plan administrator, cited via Google News. The pattern, Empower says, leaves savings sitting in accounts tied to jobs a worker no longer holds, often without a clear plan for tracking or managing them.

What did Empower report about drifting retirement savings?

Empower's reporting describes a broader trend in which workers who switch employers leave their retirement savings behind in the plan sponsored by the former employer rather than moving the funds into a new plan or an individual retirement account. The firm frames this as a structural byproduct of how workplace retirement plans are administered in the United States, where each employer typically sponsors its own plan and account holders must take affirmative steps to move money when they leave.

The underlying report does not break out figures by plan type, age group, or dollar amount in the material reviewed for this story, and no specific percentage or account total is confirmed in the sourcing available. Readers should treat any such figures circulating elsewhere as unconfirmed unless traced to Empower's own published data.

Why do retirement accounts get left behind after a job change?

Workplace retirement plans are built around the employer-employee relationship. When that relationship ends, the retirement account does not automatically follow the worker. Unless the former employee actively requests a transfer, the money generally stays in the old plan, subject to that plan's rules, fees, and investment menu.

Some workers delay action because a rollover requires paperwork and decisions about where to move the funds. Others simply lose track of accounts from jobs held years earlier, particularly after multiple job changes, address changes, or changes in the plan's administrator.

What are the risks of leaving an old retirement account behind?

An account left in a former employer's plan does not stop growing, but it can become harder to monitor. The worker is no longer getting routine communications tied to active employment, such as open enrollment notices, and may miss updates about changes to the plan's investment options or fee structure. If the former employer changes plan administrators, merges, or is acquired, locating the account later can take additional time and paperwork.

There is also a practical risk of simple forgetting. An account from an early-career job, left untouched for years, is easy to overlook when someone later tallies total retirement savings or plans for retirement income.

What options exist for consolidating an old retirement account?

Workers generally have a choice among a few paths once they identify an account left behind at a former employer: leave it where it is if the old plan allows that and its investment options and fees are competitive; roll it into a new employer's plan if the new plan accepts incoming transfers; or move it into an individual retirement account. Each path carries different rules on investment choices, fees, and required distributions later in life, and workers are typically advised to compare the specifics of the old plan against the new plan or IRA before moving funds.

Moving funds directly between retirement accounts, rather than taking a cash distribution first, generally avoids tax withholding and early-withdrawal penalties tied to premature distributions. Workers with questions about their specific plan's rollover process are typically directed to the plan administrator or the human resources department of the employer that sponsored the old plan.

What to watch

• Whether Empower or other plan administrators publish specific figures quantifying how many accounts, or how much in assets, sit unconsolidated across former employers.
• Whether federal regulators or Congress take further action on retirement account portability following reporting on this trend.
• Whether more employers adopt automatic portability services that move small retirement balances into a new employer's plan when a worker changes jobs.
• Whether workers report difficulty locating old accounts from employers that have since closed, merged, or changed plan administrators.

Workers trying to locate savings from a past job are generally advised to start with the human resources contact at the former employer, the plan's summary plan description, or the account statements last received, since plan administrators keep the authoritative record of who holds funds in a given plan.

Artiglio is A coming-soon iPhone chief of staff for briefings and drafts. Not on the App Store yet.