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How a Veteran Benefits Director Turned Plan Off-Boarding Into a Win

PensionBee

July 2, 2026

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5 minute read

Updated on:

July 2, 2026

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SummaryMain content

Summary

Learn how a benefits director improved offboarding, reduced plan burden, and helped former employees protect their retirement savings.

5 Key Takeaways for Advisors & Plan Sponsors

If you are short on time, here is how plans are rethinking the automatic rollover process:

  1. Eliminate Fiduciary Drag: Cleaning up small-balance accounts reduces per-participant administrative fees and complex audit liabilities.
  2. Provide Personalized Support: Replacing automated call centers with dedicated, human customer service eliminates friction for former employees.
  3. Minimize Fee Erosion: Avoiding excessive or hidden fees helps preserve small balances and improve participant outcomes.
  4. Support Long-Term Goals: Competitive interest rates and diversified investment options can help rolled-over assets keep pace with inflation.
  5. Enhance the Offboarding Experience: Transform a required administrative process into a positive participant experience can help encourage engagement.

The Challenge in Supporting Former Employees

Monica has spent two decades navigating what she calls the alphabet soup of retirement plans: 401(k)s, 403(b)s, 457s, and pensions. Her relentless focus on simplicity helped her drive active plan participation to an incredible 97%, placing her plans in the “top 10% of plans around the country.”

But maintaining that high standard highlighted a quiet, lingering gap: What happens to employees after they leave?

"The tricky thing with former employees," Monica says, "is they rarely complain. They're no longer in your organization. So it becomes very easily your bottom-to-do item, even though you can really care about your former employees."

When terminated employees leave small balances behind, the plan sponsor remains liable. Every missing participant requires tracked addresses, ongoing compliance communications, and inclusion in annual audits. Every single one carries a per-participant administrative fee.

Meanwhile, the participant has moved on to a new job, leaving a trail of forgotten retirement savings behind. "We all say we're going to get to it later," Monica notes. "And when later comes, it's like, oh my gosh, now I have to figure all of this out."

How Default Rollovers Can Undermine Participant Savings

When Monica began digging into how her plan handled small-balance distributions, she discovered a harsh reality about the retirement industry.

Small-balance accounts that are automatically rolled over under SECURE 2.0 are typically invested in principal-preserving options. Although these investments prioritize capital preservation over growth, fees charged by some providers can reduce returns and have a meaningful impact on smaller account balances.

As she explains, “When it comes to fees, a lot of times there are hidden fees that erode balances,” noting that in many cases, “A lot of times that partnership is a default.”

SECURE 2.0 raised the automatic rollover threshold from $5,000 to $7,000, creating a meaningful opportunity for Monica to reduce plan liability. She realized it only helps if the money is going somewhere good.

Ready to clean up your small-balance accounts and protect your former employees?

Talk to our team to run a quick plan health check.

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A Human Solution 

Determined to fix the problem, Monica issued a formal Request for Information (RFI) to evaluate providers across compliance, investments, fees, and user experience.

Most providers fell flat on customer service, defaulting to automated call centers. As Monica explains, “Most of the partners have that 1-800 number option and so now your former participants are spending countless time trying to navigate and trying to get a straight answer.” She adds, “Complexity leads to inertia.”

Then she found PensionBee.

Instead of an automated loop, PensionBee offered dedicated, human support. "When they contact PensionBee, they're not navigating a 1-800 number for 45 minutes. They reach out to John, and John answers the call. Every time they reach out, they talk to John. That's a game-changer for an everyday person."

Monica also found a structure that protected the wealth her employees worked hard to build:

  • Transparent Pricing: Clear, all-inclusive pricing with no hidden fees.
  • Long-Term Potential: Rather than remaining idle, rolled-over balances can be moved into diversified portfolios to let compound interest keep working.
  • The 1% Match: PensionBee provides a 1% match on the rollover balance, completely reframing the experience (terms & conditions apply).

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"The common feeling from a former employee when you receive a forced rollover communication is: my money is being moved without my authorization," Monica explains. "Instead, you're turning it into a positive. They have a great experience, and by the way, there's a 1% match."

The Result is Protecting the Company’s Reputation and the Participants

For Monica, managing the off-boarding process correctly is a critical piece of talent management and corporate reputation. "We focus so much on onboarding and we forget about off-boarding. A lot of employees return. Your reputation is at stake in how you treat people when they leave."

The implementation proved remarkably straightforward. After an initial setup to identify eligible participants and send safe harbor communications, the recurring process runs itself.

Monica’s Advice for Plan Sponsors & Advisors

“Give yourself some grace,” Monica says. “It’s okay because it’s such a busy role and we have so much that happens. But now that you know, what are you going to do about it? The next step is to check how many former participants with small balances you have in your plan. Ask your advisor what your current small balance threshold is—whether it’s $1,000, $5,000, or the latest SECURE 2.0 $7,000 balance. And start the conversation: what are we doing about these balances? I need to know the fees involved and the participant experience. Be the center of that decision. This is your committee’s decision.”

For advisors, helping a client run this exercise is a simple way to clear administrative burden, reduce plan costs, and protect participant outcomes.

"This was such a satisfying project," Monica says. "It became a passion project. And I think it can become yours too."

Disclaimer

Monica is not a PensionBee customer and received a one-time cash payment for their endorsement. Investing involves risk. This post, and any associated customer testimonial or third party endorsement, is provided solely for informational and educational purposes, should not be taken as tax, legal, financial or investment advice and is not an offer, solicitation, or recommendation to buy or sell any securities or investments.

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Options on Rollovers
A rollover is not your only option for an old 401(k) or IRA, you may alternatively decide to leave your assets with your former employer, rollover your plan to a new employer or to cash in your old plan with the resulting tax penalties applied.  PensionBee Inc. does not provide tax advice or individual recommendations as to which of these options is most appropriate for your individual circumstances.  To understand the implications of each of the options available to you and help you decide between them you may wish to consult a tax professional who has knowledge of your individual circumstances. For more information see FINRA - Retirement Accounts.

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