A Government Accountability Office report found that billions in savings from forced transfers out of 401(k) plans are defaulted into costly, unproductive IRAs, most of which generate more in fees than returns.

At the request of Sens. Tom Harkin, D-Iowa, and Elizabeth Warren, D-Massachusetts, the GAO examined the regulation of 401(k) accounts affected by the millions of participants who change jobs every year, and compared the nation's approach to practices in six other countries.

What the GAO found wasn't very good news for owners of the smallest accounts. When participants with less than $5,000 in a 401(k) change jobs and neglect to leave instructions on what to do with the account, sponsors can default the accounts into IRAs.

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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.