Open Enrollment Is Here. Know Your Force-Out Numbers

PensionBee

September 1, 2026

5 minute read

Updated on:

September 1, 2026

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Summary

Most plan sponsors and their advisors have never reviewed the automatic rollover provider handling terminated participants. Here's how to find the force-out number before open enrollment.

Sponsors have a version of the number savers are chasing this fall, and most, along with the advisors who guide them, have never run it.

Every plan sponsor, and every advisor reviewing a client's plan, should be able to answer four questions.

How many terminated employees are sitting in the plan right now with balances too small to stay?
Where do those balances end up once they leave?
What fees are they paying once they're there?
What is the plan still responsible for while those balances sit?

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Most can't answer all four. That gap is the forceout number.

What Is a Force-Out, and Why Does the Threshold Matter?

A forceout, also called an automatic rollover, moves a terminated employee's small retirement balance out of the plan and into an IRA without the employee's action. SECURE 2.0 raised the mandatory threshold from $5,000 to $7,000. More terminated participants now qualify, and larger balances move through a pipeline most plans set up under the old threshold. A plan that hasn't reviewed its provider since the change is pushing more money through a relationship built on outdated assumptions.

Why Do Most Sponsors Default Without Reviewing?

Most plan sponsors simply accept whatever automatic rollover solution comes bundled with their recordkeeper or TPA. It's rarely a decision anyone made on purpose. It's the box that got checked during implementation and never revisited.

That's the pattern in our recent case study on plan off-boarding. A 20-year benefits veteran with active participation in the top 10% of plans nationally had never looked at what happened to participants after they left.

Industry benchmarking research suggests recordkeeper and provider relationships have typically been reviewed only once every three to five years. In the years between reviews, headcount grows, balances move, fees accrue, and liability builds unexamined. The same review applies whether it's run by the sponsor directly or by the advisor managing the relationship.

Read the full case study →

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What Liability Does the Plan Carry After the Employee Leaves?

Every terminated participant with a small balance still sitting in your plan is still your responsibility. That means tracked addresses, required compliance communications, and inclusion in your annual audit. Each one stays a line item, indefinitely, until the balance is resolved.

Research compiled by PensionBee and the Employee Benefit Research Institute found that most automatic rollover accounts simply sit in place for years, and the volume moving through this pipeline is only growing.

Part of the reason is that most participants never got a clear explanation of their options when they left. Only 1 in 5 say their former employer walked them through it. That's not a participant communication gap. It's a sponsor communication gap, and it's one your plan is positioned to close or continue.

Since these accounts are typically parked in principal-preserving vehicles, the intent is capital protection, not growth. However, fees layered on top of a stagnant, cash-heavy balance can quietly erode it over years. For your plan, that's not just a poor outcome for someone who used to work for you. It's a fiduciary exposure sitting on your books, unreviewed.

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

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

Talk to our team

Where Does This Fit Into an Advisor's Client Conversations?

For an RIA managing a plan sponsor relationship, the force-out number is often a conversation clients haven't had in much depth. It tends to sit outside the active-participant metrics most reviews focus on. That makes it easy to overlook, but also relatively straightforward to raise. Confirming a client's threshold, provider, and fee structure is a low-lift way to bring fiduciary risk reduction and cost optimization into a plan review that's likely already on the calendar.

What Does a Real Review Actually Look Like?

When the benefits director, Monica, in our case study, finally looked into it, she didn't tinker with her existing setup. Instead, she ran a Request for Information (RFI) across compliance, fees, investment options, and participant experience. What she found was a pattern that shows up across the industry. Automated call center support makes it hard for former employees to reach a real person, and fee structures were never clearly disclosed as part of the original recordkeeper bundle.

Her advice to other sponsors and their advisors was simple. Find out how many terminated participants with small balances you're currently carrying. Confirm what threshold your plan is actually using. Ask directly what those participants are experiencing and what they're paying for it. Then bring it to committee. It's a fiduciary decision, and it deserves a deliberate one.

What Happens to the Participant After the Rollover?

Most former employees never asked for a forced rollover, so it's easy to see why it can feel like something being done to them rather than for them. Their money moved, and no one explained why. That impression changes once the person on the receiving end can see exactly what that money is working toward.

Most automatic rollover providers stop at moving the money. A notice goes out, the account transfers, and that's the end of it. What's missing is the piece that makes it feel like progress instead of paperwork: a clear picture of what that balance is actually working toward. Give the former employee that, and a rollover isn't just an account being relocated. It's a specific, identifiable gap being closed.

That's the difference between a notice someone ignores and an off-boarding experience that actually lands.

How Do You Find Your Force-Out Number?

Pull together what's already scattered across the recordkeeper's systems into one picture. Our Automatic Rollover Health Check is built to do exactly that, for a sponsor's own plan or for an advisor reviewing one on a client's behalf.

Run your plan's health check →

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Open enrollment is where savers find their number every fall. This September, sponsors and advisors can find theirs.

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