Senator Elizabeth Warren (D-MA) did good work with her writingon behalf of financial consumers, driving creation of the ConsumerFinancial Protection Bureau (CFPB).

But lately, you have to wonder if she hasn’t jumped theshark.

In July, Warren teamed with Steve Daines (R-MT)to introduce legislation called The Retirement Savings Lost andFound Act of 2016 (S. 3078). The law aims to address an obscureretirement planning problem that almost nobody complains about –namely: 1) a participant leaves a job with a 401(k) balance of$5,000 or less in a 401(k); 2) the employer chooses to “force out”the participant by transferring the balance to a Traditional IRAwith a default investment choice; and 3) the IRA suffers fromneglect and performs poorly. Apparently, some people forget theyown these IRAs!

To remedy this problem, S.3078 would establish a federal Office of RetirementSavings Lost and Found to centralize the informationparticipants need to track force-out IRAs. It also would requireemployers to report to the Office, via the IRS, information on allforce-outs. Finally, it would require any force-outs of $1,000 orless to be sent to the federal government for investment in U.S.Treasuries.

While this bill would produce small benefits for retirement planparticipants, it is another brick in a growing wall of federalgovernment meddling in private retirement plans, their informationand investments.

The U.S. government clearly wants to know as much as possibleabout where retirement plan money is held. It would eventually likea hefty share of it to be invested in U.S. Treasuries.

In initiatives such as S. 3078, what federal policymakers seemto fear most is the idea that plan participants will make their ownproactive decisions based on professional advice.

There was an alternative route Warren-Daines could have taken tofix the problem – namely, require employers to offer participantseducation at the time of any force-out. Emphasize participants’right to choose their own IRA with professional help. The CFPB haswritten a number of educational guides, in plain English, that areproving useful to consumers of mortgages, credit cards and otherfinancial services. Why not one for force-out participants?

The answer is that the concept of financial consumerism isshifting in Washington. The federal government wants more of the$7.3 trillion in IRAs and $6.7 trillion in defined contributionplans to be invested long-term in U.S. Treasuries. On their own orwith professional guidance, most consumers aren’t likely to chooseTreasuries. So, financial consumerism is starting to mean: “Let thefeds take care of you and make automatic investment decisions foryou. It’s better than you can do on your own.”

There is a way you can help your small business clients avoidnew federal reporting, provide a valuable service to participants,and protest against a new Department of Retirement Savings Lost andFound.

It is to offer plans in your market a free counseling session toany participant who may be facing a force-out. In many cases,potential force-out situations can be identified months before theyhappen, and that’s the best time to offer advice. If you currentlydeliver 401(k) enrollment education, emphasize the need to makeproactive IRA rollover decisions to avoid force-outs.