Labor Agency to Let Bankruptcy Trustees Handle Abandoned 401(k)s

The Labor Department has finalized a long-awaited rule allowing bankruptcy trustees to dole out abandoned retirement assets from 401(k) plans.

The Employee Benefits Security Administration’s new interim final rule and amended prohibited transaction exemption released Thursday are iterations of a 2012 proposal to expand the Abandoned Plan Program to empower court-approved debt officers to terminate a plan that has been left behind by an employer plan sponsor.

Retirement savers who don’t have a way of accessing their assets because of a plan administrator’s bankruptcy, imprisonment, death, or other circumstances will now be able to receive the funds through trustees. Under ...