November 20, 2023

Q: We are looking forward to seeing the U.S. Department of Labor’s (DOL’s)efforts to help savers locate left-behind or forgotten 401(k) accounts by creating a national search database. Are there any statistics that shed light on the magnitude of this problem in the retirement plans industry?

A: Many job switchers leave their 401(k) behind to deal with later. The result is that they can end up with a string of 401(k) accounts tied to former employers, each with different fees, asset allocations and custodians. In an updated version of its 2021 white paper, “The True Cost of Forgotten 401(k) Accounts,” Capitalize found forgotten accounts have grown by 20% in the last two years. As of May 2023, there are an estimated 29.2 million forgotten or left-behind 401(k) accounts in the United States, representing $1.65 trillion in assets. Capitalize research attributes the growth to last year’s “Great Resignation” push and raised rates of job switching. The average account balance of a forgotten 401(k) increased to $56,616 from $55,400, and in aggregate, the assets left behind by job changers now represent close to 25% of the total savings in 401(k) plans.

As a side note, if you are considering embarking on a search for missing participants who still have accounts with your plan, here are five tips for plan sponsors to better document their missing participant search efforts.

“The True Cost of Forgotten 401(k) Accounts” can also be viewed at:

“5 Tips for Located Missing Participant Searches” (401kSpecialist Magazine, June 15, 2023) can also be viewed at:

Q: Our committee is working with our plan advisor to create and implement a pre-retiree education campaign early next year. Are there any recent statistics regarding workers delaying their retirement and their reasons for doing so?

A:  Investors struggling with ongoing inflation, high interest rates and an unstable economic environment are considering delaying their retirement plans, according to Nationwide’s eighth annual Advisor Authority survey. The survey by the Nationwide Retirement Institute finds that 25% of pre-retirees — defined as nonretired investors aged 55–65 — are planning to retire later than expected and another 15% are unsure if they will ever retire. Although a number of factors are contributing to their decision to delay retirement, the majority (60%) said inflation poses the greatest immediate challenge to their retirement portfolio over the next 12 months. An economic recession (46%), market volatility (36%) and taxes (23%) are also factors in their decision. You can also view the survey results at:

Q: We are considering outsourcing some of our ERISA 3(16) administrative fiduciary responsibilities. What are some things to keep in mind?

A: Many plan sponsors already outsource administrative duties to their recordkeeper (such as hardship approvals and preparation of 5500 forms) in a nonfiduciary capacity. Some are now looking to outsource not only the work, but also the fiduciary discretion or control, to minimize workloads and/or reduce ERISA liability. Given the scope of responsibilities, a provider’s technological capabilities and knowledge, skill and experience with plan administration is very important. Connectivity to the recordkeeper (when the 3(16) fiduciary is unrelated) also matters to ensure a quality service experience for plan participants. To further explore governance models that delegate some level of fiduciary responsibility to external providers, check out “Defined Contribution Plan Governance Models: A Guide for Plan Sponsors,” published by the Defined Contribution Institutional Investment Association. You can also view the guide at:



For plan sponsor use only, not for use with participants or the general public. This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045;

©2023 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance; nor as the sole authority on any regulation, law or ruling as it applies to a specific plan or situation. Plan sponsors should consult the plan’s legal counsel or tax advisor for advice regarding plan-specific issues.