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Tracking down a Retirement Account

Many individuals have worked for different companies throughout the years and may have had a 401(k) plan worth a small amount of money when they left.  Some people lose track of these accounts over the years or find that their plan was transferred to another administrator. Sometimes, in such a case, the administrator may not be able to locate the plan.  Unfortunately, there is no central repository for missing 401(k) funds to date.

 

The Pension Benefit Guaranty Corporation is responsible for safeguarding traditional pensions.  There is a proposal by the Pension Benefit Guaranty Corporation to hold orphaned 401(k) funds from closed plans which would start in 2018.  Senator Steve Daines and Senator Elizabeth Warren proposed that the IRS establish an online database that would allow individuals to locate 401(k) plans and pension plans from open and closed accounts.

 

If an individual’s 401(k) balance was less than $5,000 at the time they left a company, it is possible that a forced IRA transfer took place.  This means that the money would be housed with a small accounts financial services firm.  When an employer cannot locate an individual and they proceed to close the account, the money may be transferred to a bank account, IRA, or state escheat office.  If this took place, a person has the option to contact the state escheat office to locate the unclaimed money. Another option is, if the employer is still in business, an individual may contact them directly to see what happened to the account.  Further, if the company no longer exists, the United States Department of Labor may be able to help track down the money.

 

Tracking down lost retirement accounts can be a tedious process.  That is why it is of utmost importance to always keep track of retirement plans. There are many instances when employers may allow their employees to transfer old 401(k) accounts into their plan, or roll the money into an IRA. It is important to hold onto retirement money and consistently keep track of it, rather than attempting to locate it years later.

 

Maintaining good records is an important aspect of estate planning. If you or a loved one needs assistance tracking down a retirement account, or any other aspect of estate planning or elder law, contact the experienced elder law attorneys at Hobson-Williams, P.C. for the representation you deserve and to ensure that your future plans are carried out. Call us today at (718) 210-4744 for more information or to schedule a consultation.

 

Proposed Rules to Retirement Savings Investments Require More Transparency from Brokers

After four years of planning, federal regulators of the U.S. Labor Department proposed rules that would strengthen the protection of those investing their retirement money.  The new rules would require that brokers owe a stronger fiduciary duty to their clients.  Currently, the rules are vague and use ambiguous language, allowing brokers to skirt around the guidelines and in many instances, put their own investment interests first.

Brokers have to recommend investments that are “suitable” for their clients.  While they need to take into account the client’s age, and both the risk factors and the financial goals of the investment, many times their recommendations are persuaded by their own potential to gain a profit at the client’s expense.  Under the new regulations, a broker would have to inform their client whether they had a conflict of interest and received a fee as a result of the investment.  The transparency required under the new rules would enhance the quality of the advice brokers give to the investors.

Although the financial industry claims that stricter rules will raise costs and limit advice, retirees will be offered greater latitude in making the determination with whom they should be investing their money, and deterring bad advice.  Additionally, there are exemptions to the proposed rules that would allow brokers to receive payments otherwise prohibited, provided that they offer their client the least expensive option.

The proposed rules are open for commentary for 75 days beginning on April 13.

Many people use their retirement funds investments as part of their estate planning.  For more information about estate planning, contact an experienced elder law attorney.  Call the Law Office of Tanya Hobson-Williams at 1 (866) 825-1529 or visit http://www.thobsonwilliamslaw.com.