Small 401(k)s may automatically follow workers to their next job — except Roth money

A network of plan administrators is helping small 401(k) accounts that were previously rolled into IRAs move into a worker's next employer plan, improving portability for small-balance retirement savings. Roth balances are excluded from these transfers due to tax treatment, limiting the scope of reunification. The process could reduce orphaned IRAs and lower administrative friction and costs, but impact on asset levels is incremental and unlikely to drive market moves.

Analysis

A network of plan administrators is helping small 401(k) accounts that were previously rolled into IRAs move into a worker's next employer plan, improving portability for small-balance retirement savings. Roth balances are excluded from these transfers due to tax treatment, limiting the scope of reunification. The process could reduce orphaned IRAs and lower administrative friction and costs, but impact on asset levels is incremental and unlikely to drive market moves.