The lousy economy hasn't been bad for everyone.
The lousy economy hasn't been bad for everyone.
More companies and workers have abandoned 401(k) plans amid the downturn, and that has helped Millennium Trust Co. LLC, which provides rollover services to companies that terminate 401(k) plans or are unable to contact 401(k) account holders who have left.
The accounts must have less than $5,000 in them, and they average about $3,000 each.
Millennium Trust is able to find between 60% and 75% of such account holders annually, according to Terry Dunne, senior vice president and a director of automatic rollovers at the company.
In addition to companies' going out of business because of the poor economy, the high unemployment rate has led to more 401(k) account holders' losing their jobs and not letting companies know what they want done with their 401(k) balances, he said. Further, more companies are turning to auto-rollover individual-retirement-account specialists to handle abandoned plans, because they aren't equipped to track down former employees, Mr. Dunne said.
“The economy is such that more employees are on the street. There's a greater number of people that are not communicating with the company as to what it is they want to do with their retirement balances,” Mr. Dunne said.
Assets in auto-rollover IRAs set up by Millennium Trust increased 77% in the first 10 months of this year, compared with a 73% increase for all of 2008, he said.
Assets increased to $195 million at the end of last month, from $110 million at the beginning of the year, Mr. Dunne said. At year-end 2008, the company had $95 million in auto-rollover IRA assets, up from $55 million at the beginning of the year.
The number of auto-rollover IRAs at Millennium increased to 70,000 by the end of October, a 56% increase from 45,000 accounts at the beginning of the year, Mr. Dunne said.
