Small 401(k) Accounts May Transfer Automatically to New Employers, Excluding Roth Funds

Small 401(k) Accounts May Transfer Automatically to New Employers, Excluding Roth Funds
1 min readEconomyBusiness

In Brief

A network helps small 401(k) accounts move to new workplace plans, but excludes Roth money.

Key Facts

  • A network of plan administrators assists small 401(k) accounts rolled into IRAs to transfer to a worker's next workplace plan.
  • Roth 401(k) funds are not included in the automatic transfer process.
  • The process is designed to help workers keep track of retirement savings when changing jobs.

What Happened

Plan administrators have established a network to facilitate the transfer of small 401(k) accounts, rolled into IRAs, to a worker's new employer plan. Roth 401(k) funds are not included in this automatic process.

Why It Matters

This initiative aims to reduce the risk of workers losing track of small retirement accounts when changing jobs. Excluding Roth funds may affect workers who hold these types of accounts. Based on a single source report

What's Next

Observers may monitor how the exclusion of Roth funds impacts workers and whether future changes will address this gap.

Sources