Research Report Small Retirement Accounts: Issues and Options
J. Mark Iwry, Christopher Pulliam, William G. Gale
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The existence of small and inactive accounts is a largely inevitable feature of the US retirement saving system, which features employer-based retirement plans, individually managed accounts, and automatic enrollment. We consider the issues raised by these accounts, including the corrosive effects of fees, and the increased likelihood of pre-retirement leakage and lost accounts. We examine five sets of partial solutions: extensive reform of the rollover and account consolidation rules; enhancement of the saver’s credit; a national retirement dashboard; a default account consolidator; and creating a system with a single account for each worker. Each idea has advantages and drawbacks. Policy makers should consider these options as they contemplate reform.

Research Areas Taxes and budgets
Tags Individual taxes
Policy Centers Urban-Brookings Tax Policy Center