On Monday April 22, we will mark the 54th annual Earth Day to celebrate our planet’s natural surroundings and contemplate how we can help preserve them. The advent and ongoing expansion of recycling programs has enabled society to reduce waste. Although we still have a long way to go, it’s a step in the right direction beyond post-World War II throwaway culture.
The U.S. retirement system also has experienced significant 401(k) asset waste in recent decades. Lack of a seamless process for moving retirement savings from one employer’s sponsored plan to another, coupled with a highly mobile American workforce and expansion of automatic enrollment under the Pension Protection Act of 2006 triggered unintended consequences. They include a plethora of small, stranded accounts littered throughout the 401(k) system, as well as an uptick in 401(k) cash-outs.
