If you’re one of the millions of Americans saving for retirement with a 401(k) or similar account, you assume (and hope) your financial and personal information are safe.

But did you know that retirement plan service providers may share or sell your personal information or use it to market other financial products and services?

Today’s WatchBlog post looks at our new report on why retirement plans share data and what’s being done to protect your personal information.

When and why do retirement plans share data?
More than 126 million Americans participated in employer-sponsored retirement plans with assets totaling more than $9 trillion (as of 2023). When your employer offers a 401(k) or other retirement account, they usually rely on outside service providers to manage it. For example, asset managers need access to your data to invest employee and employer retirement contributions. Payroll providers need the information to ensure retirement contributions are accurately processed. And record keepers need it to manage your account.

The data that your employer shares can include personally identifiable information like your birth date, social security number, account numbers and balances, and more.

But many people may not be aware that service providers can also use your personal information to market financial products and services. And, service providers could potentially even sell your information to third parties, such as data brokers.

While some data sharing can be expected to administer the plan, here’s the concerning part: As more entities gain access to your data, the chances that your information may be inadvertently exposed increase. As a result, you might receive some unwanted marketing for financial products or services. But more concerning is that this sharing could put you at greater risk of identity theft or other fraudulent activity.

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