NEW YORK, Nov. 18, 2025 (GLOBE NEWSWIRE) -- Each year, up to 2 million old 401(k) accounts are automatically forced out of employer plans and placed into low-yield Safe Harbor IRAs, often without their owners’ knowledge. New sentiment data by PensionBee reveals that nearly two-thirds of Americans (63%) with left-behind 401(k)s are unaware that this practice exists or that it can derail retirement savings.
Originally designed to protect small balances left behind when workers change jobs, Safe Harbor IRAs have become a resting place for forgotten money. The law allows employers to automatically roll over ex-employee balances under $7,000 into accounts designed to preserve rather than grow capital.
Recent PensionBee research found that over 75% of accounts rolled into Safe Harbor IRAs linger for more than three years, contributing to $28 billion in stagnant savings this year and an estimated $43 billion by 2030.
The chain reaction
The findings reveal a clear pattern driving the crisis:
1. Lack of employer guidance.
When employees leave a job, they generally face four choices for their 401(k): leave it with their former employer, roll it into a new employer plan, roll it into an IRA, or cash out. Yet, few receive any real direction.
- Over half of survey respondents (53%) said their former employer did not help them understand their 401(k) options when departing, and one in three (33%) received no information at all.
- Only 19% had their options clearly explained during their exit interview, while just 10% received guidance in writing.
2. Abandoned rollovers.
Left to navigate a complex process on their own, PensionBee found that over 40% of Americans who attempted to roll over a left-behind 401(k) gave up before finishing. Respondents cited the following reasons:
- 25% said they lacked clear instructions
- 26% forgot about it or lost track
- 28% said the process was too time-consuming
- 17% weren’t sure where to move it
3. Forced-out balances.
Unfinished rollovers mean abandoned accounts. Employers transfer approximately 1.7 million 401(k) accounts into Safe Harbor IRAs annually. By 2030, the number is projected to rise to 2.2 million.
4. Long-term savings loss.
Because most Safe Harbor IRAs remain in cash-like products, these accounts earn minimal interest and often have high fees. This combination can erode small balances, significantly depleting nest eggs over time.
“With up to 12 jobs over a career and potentially as many retirement accounts, the average person will likely need to make important retirement decisions at several points throughout their career,” said Romi Savova, Founder and CEO of PensionBee. “Employers still have a crucial role to play in helping people make active choices rather than accidental ones.”
A growing awareness gap
The findings also revealed that just one in five savers (20%) can state the exact rule and dollar threshold for Safe Harbor IRAs. With an increasingly mobile workforce, workers who remain unaware risk the cumulative impact of decades in suboptimal default accounts.
“When growing evidence shows that millions are making critical financial decisions by default rather than by choice, it’s clear that savers need better retirement guidance,” added Savova. “Better employee communication during the exit process is one potential avenue to closing that gap.”
Participation Details: PensionBee survey data was sent out by Attest between September 23–27, 2025, to a total of 1,000 U.S. retirement savers age 18+ who self-reported having at least one left-behind 401(k).
Voluntary Participation: Participation in the survey was voluntary. Respondents were free to decline participation or skip any questions they chose not to answer.
About PensionBee
PensionBee (LON: BEE) is a leading retirement savings provider, helping people easily consolidate, manage, and grow their retirement savings. The company manages over $9 billion in assets and serves approximately 300,000 customers globally, with a focus on simplicity, transparency, and accessibility. PensionBee offers Traditional, Roth, SEP, and Safe Harbor IRAs with ETF-backed portfolios that include SPY and MDY from State Street Investment Management, one of the world’s largest asset managers.
Notes
The information provided in this announcement, including any projections for investment returns and future performance, is for informational and educational purposes only and should not be considered investment advice. Past performance is not indicative of future results. All investments carry risk, including the potential loss of principal. PensionBee is not liable for any losses or damages arising from the use of this information. Projections and forecasts are based on assumptions and current market conditions, which are subject to change.
Media Contact:
Adela McVicar
SR PR Manager, PensionBee
adela.mcvicar@pensionbee.com
