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University of Chicago Employees: Don’t Let Forgotten 401(k) and Pension Accounts Drain Your Retirement

'University of Chicago employees should recognize that forgotten 401(k) accounts are not just numbers left behind—they represent real retirement dollars that can be reclaimed and consolidated to bolster their financial future.' – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement.

'University of Chicago employees who leave old 401(k) accounts unattended risk higher fees and missed opportunities, which is why it's wise to track and consolidate these balances into a more organized retirement portfolio.' – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

Why so many retirement accounts are forgotten and the risks involved.
The financial costs of leaving accounts unattended and how to locate old 401(k)s or pensions.
The options available for handling old accounts and why consolidation may matter.

The $2 Trillion Oversight in Retirement Savings: Forgotten 401(k) Accounts

The aim of retirement savings is to deliver a reliable base for the future. Yet one surprising trend continues to grow: trillions of dollars locked in 401(k) accounts that have been forgotten or left behind. According to recent research, there are about 31.9 million forgotten or left-behind 401(k) accounts, collectively holding roughly $2.1 trillion in assets. ¹ That number is up 30% since just two years ago, and has almost doubled over the past decade. ¹

On average, a forgotten 401(k) account holds about $66,691. ¹ So how do these accounts get forgotten? After leaving a job, many workers leave their 401(k) assets inside their previous employer's retirement plan. For those who move on from University of Chicago or other large employers, letting these balances rest unattended can incur long-term opportunity costs.

Why Retirement Accounts Get Forgotten

It might seem far-fetched to lose track of retirement money, but greater job mobility has made it much more common. Workers shift roles or employers more often today than in the past, and each change introduces a decision point on how to handle retirement balances. Some leave assets with previous employers; others roll them into IRAs or into new employer plans.

It’s not always problematic to leave funds in an older plan. But without regular attention, complications may arise. Many employers cease covering plan administrative costs when an employee departs, which can slowly erode the account. Maintaining multiple accounts can also result in higher overall management fees, less oversight over retirement assets, and missed growth potential. For those with long tenures, especially in large corporations, forgotten accounts often consequently silently diminish in value.

The Cost of Inattention

When accounts are left unmanaged, investment choices made years ago may no longer match your situation or current market conditions. Portfolios set long ago might underperform relative to better-aligned allocations today. Over time, fees, a lack of rebalancing, and outdated allocation strategies can shrink balances.

Federal regulators are aware of the problem. Tools like the Retirement Savings Lost and Found Database ² have been launched to help workers trace and reclaim forgotten retirement account balances. This applies to all workers, including those exiting major corporations, since even meticulous savers may inadvertently leave funds behind.

How to Locate Forgotten 401(k)s and Pensions

Tracing down old retirement accounts may require using multiple resources:

1. Unclaimed Retirement Benefits National Registry – Search by Social Security number for unclaimed balances.
2. Pension Benefit Guaranty Corporation (PBGC) – Tracks discontinued pension plans and missing participants.
3. Former Employer or HR Departments – Companies or their successors may retain records.
4. Historical Records – W-2s, benefit statements, or plan summaries often contain clues.
5. Department of Labor’s Form 5500 Database – Lists plan administrators and contact information.
6. State Retirement Boards – For public-sector pension plans.
7. U.S. Department of Labor Help Line – Offers guidance on ERISA-regulated plans.

For employees who have changed divisions, sites, or roles within large firms, these steps help consolidate scattered retirement holdings.

Your Options for Old Accounts

When departing from a job, most workers face four main choices for handling their 401(k):

Move it to a new employer’s retirement plan — consolidates balances and keeps tax treatment intact.
Rollover into an IRA — gives broader investment flexibility, often at lower cost.
Cash it out — comes with taxes and penalties, reducing long-term results.
Leave it with the old employer’s plan — keeps the account open, but no new contributions or employer matches apply, and fees may escalate.

For those nearing retirement, making a considered choice can determine whether past balances continue contributing or quietly decline.

Why Consolidation Matters

Many financial advisors recommend combining accounts when feasible. Consolidation reduces administrative burdens, simplifies oversight, and aligns portfolios more consistently. Having multiple accounts across former employers increases complexity—especially during required minimum distribution (RMD) years.

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To further complicate matters, research suggests that inactive accounts often lag in performance, facing higher fees and fewer investment options. ¹ For someone with a long University of Chicago career plus various other roles, consolidation can help maintain coherence across retirement holdings.

The Modern Rollover Advantage

Historically, rollovers involved paperwork, delays, and mailed checks. Today, electronic direct rollovers can transfer funds from one retirement plan to another—or into an IRA—without triggering taxes or penalties. That streamlines the process dramatically.

This means professionals leaving large firms no longer need to dread the complexity of combining accounts. With modern rollover tools, managing retirement assets is more accessible than ever.

The Bigger Picture

Forgotten accounts reflect how job changes and corporate shifts complicate retirement planning. Nationally, more than $2.1 trillion sits in dormant accounts, and neglecting them may cost individuals hundreds of thousands of dollars over their careers. ¹

University of Chicago employees may risk underutilizing retirement balances if they omit to manage legacy accounts. But with available tools, consolidation, and ongoing oversight, those dormant assets can once again contribute meaningfully to retirement readiness.

Final Thoughts

The trillions in neglected 401(k)s highlight a significant gap in retirement planning. While retaining assets in a prior employer’s plan is permissible, it often comes with higher costs and less visibility. Fortunately, resources—like government registries and streamlined rollovers—make it easier to recover and consolidate past accounts.

For University of Chicago employees, the takeaway is simple: don’t let forgotten balances slip away. With attention and action, those legacy accounts can become active components in a more cohesive retirement approach.

Sources:

1. Capitalize Money, Inc. ' The True Cost of Forgotten 401(k) Accounts ,' Sept. 30, 2025.

2. U.S. Department of Labor, Employee Benefits Security Administration. Retirement Savings Lost and Found Database . 18 Nov. 2024.

What are the eligibility criteria for participation in the SEPP plan for employees of The University of Chicago, and how can factors like years of service and age impact an employee's benefits under this plan? Discuss how these criteria might have changed for new employees post-2016 and what implications this has for retirement planning.

Eligibility Criteria for SEPP: Employees at The University of Chicago become eligible to participate in the SEPP upon meeting age and service requirements: being at least 21 years old and completing one year of service. For employees hired after the plan freeze on October 31, 2016, these criteria have been crucial in determining eligibility for newer employees, impacting their retirement planning as they do not accrue benefits under SEPP beyond this freeze date.

In what ways does the SEPP (Staff Employees Pension Plan) benefit calculation at The University of Chicago reflect an employee's years of service and final average pay? Examine the formulas involved in the benefits determination process, including how outside factors such as Social Security compensation can affect the total pension benefits an employee receives at retirement.

Benefit Calculation Reflecting Service and Pay: The SEPP benefits are calculated based on the final average pay and years of participation, factoring in Social Security covered compensation. Changes post-2016 have frozen benefits accrual, meaning that current employees’ benefits are calculated only up to this freeze date, affecting long-term benefits despite continued employment.

How can employees at The University of Chicago expect their SEPP benefits to be paid out upon their retirement, especially in terms of the options between lump sum distributions and annuities? Analyze the advantages and disadvantages of each payment option, and how these choices can impact an employee's financial situation in retirement.

Payout Options (Lump Sum vs. Annuities): Upon retirement, employees can opt for a lump sum payment or annuities. Each option presents financial implications; lump sums provide immediate access to funds but annuities offer sustained income. This choice is significant for financial stability in retirement, particularly under the constraints post the 2016 plan changes.

Can you elaborate on the spousal rights associated with the pension benefits under the SEPP plan at The University of Chicago? Discuss how marital status influences annuity payments and the required spousal consent when considering changes to beneficiary designations.

Spousal Rights in SEPP Benefits: Spouses have rights to pension benefits, requiring spousal consent for altering beneficiary arrangements under the SEPP. Changes post-2016 do not impact these rights, but understanding these is vital for making informed decisions about pension benefits and beneficiary designations.

As an employee nearing retirement at The University of Chicago, what considerations should one keep in mind regarding taxes on pension benefits received from the SEPP? Explore the tax implications of different types of distributions and how they align with current IRS regulations for the 2024 tax year.

Tax Considerations for SEPP Benefits: SEPP distributions are taxable income. Employees must consider the tax implications of their chosen payout method—lump sum or annuities—and plan for potential tax liabilities. This understanding is crucial, especially with the plan’s benefit accrual freeze affecting the retirement timeline.

What resources are available for employees of The University of Chicago wishing to understand more about their retirement benefits under SEPP? Discuss the types of information that can be requested from the Benefits Office and highlight the contact methods for obtaining more detailed assistance.

Resources for Understanding SEPP Benefits: The University provides resources for employees to understand their SEPP benefits, including access to the Benefits Office for personalized queries. Utilizing these resources is essential for employees, especially newer ones post-2016, to fully understand their retirement benefits under the current plan structure.

How does The University of Chicago address benefits for employees upon their death, and what provisions exist for both spouses and non-spouse beneficiaries under the SEPP plan? Analyze the specific benefits and payment structures available to beneficiaries and the conditions under which these benefits are distributed.

Posthumous Benefits: The SEPP includes provisions for spouses and non-spouse beneficiaries, detailing the continuation or lump sum payments upon the death of the employee. Understanding these provisions is crucial for estate planning and ensuring financial security for beneficiaries.

What factors ensure an employee remains fully vested in their pension benefits with The University of Chicago, and how does the vesting schedule affect retirement planning strategies? Consider the implications of not fulfilling the vesting criteria and how this might influence decisions around employment tenure and retirement timing.

Vesting and Retirement Planning: Vesting in SEPP requires three years of service, with full benefits contingent on meeting this criterion. For employees navigating post-2016 changes, understanding vesting is crucial for retirement planning, particularly as no additional benefits accrue beyond the freeze date.

Discuss the impact of a Qualified Domestic Relations Order (QDRO) on the SEPP benefits for employees at The University of Chicago. How do divorce or separation proceedings influence pension benefits, and what steps should employees take to ensure compliance with a QDRO?

Impact of QDROs on SEPP Benefits: SEPP complies with Qualified Domestic Relations Orders, which can allocate pension benefits to alternate payees. Understanding how QDROs affect one’s benefits is crucial for financial planning, especially in the context of marital dissolution.

How can employees at The University of Chicago, who have questions about their benefits under the SEPP plan, effectively communicate with the Benefits Office for clarity and assistance? Specify the various communication methods available for employees and what kind of information or support they can expect to receive.

Communicating with the Benefits Office: Employees can reach out to the Benefits Office via email or phone for detailed assistance on their SEPP benefits. Effective communication with this office is vital for employees to clarify their benefits status, particularly in light of the post-2016 changes to the plan.