WI20-04: Lost and Found: Claiming Behavior in Abandoned Retirement Accounts

Individual retirement savings are increasingly spread across multiple accounts, putting them at risk of going “unclaimed”. This paper builds on prior research finding that in 2016, Americans held an estimated 70,000 unclaimed retirement accounts totaling $38 million. The goal of this project is to examine the claiming patterns of these accounts after they are reported as unclaimed. We find significant variation by state procedures: in Massachusetts, where owners must initiate claims, only 3.4% of unclaimed retirement accounts reported in 2016 were “reclaimed” within two years; in Wisconsin, where the state auto-matches unclaimed funds with owners using Social Security matches, a striking 67% of funds were reclaimed in that same time period. We augment these results with primary data collection from a survey fielded to retirement account holders in Wisconsin to ascertain potential reasons underlying unclaimed accounts and reclaiming behavior, and find that a failure to consolidate accounts—an action that could prevent them from becoming unclaimed—arises in part due to plan defaults and rollover difficulties.