Most of today’s professionals expect to work for more than one employer within their lifetime.  Multiple employers may mean multiple retirement accounts.  As participants move from one employer to the next, they may lose track of those accounts with smaller deferral amounts.  Plan sponsors should be motivated to help those inactive participants keep track of and recoup their deferrals.  Keeping only active participants in the plan can help keep the plan’s costs down and, if the plan falls below 100 participants, eliminate the need for an annual audit.


The best practice for plan sponsors is to remind terminating participants that they may have the option to rollover funds to an IRA or another employer’s 401(k).  If plan sponsors lose track of inactive participants and alternatives such as internet searches and emergency contacts don’t produce results, plan sponsors may post participant names to the National Registry for Retirement Benefits for free.  This might give the inactive participant the opportunity to collect the account if it occurs to the participant to search the database.   As a last resort, plan sponsors may employ the letter forwarding services of the Social Security Administration, but be warned, they will charge a non-refundable fee for this service and will not confirm delivery or tell the plan administrator the location of the inactive participant.