Why did my old provider transfer my account? For balances less than $5K

When you leave your employer, your 401(k) savings remain in their plan. If your assets are greater than $5,000, they will remain in that 401(k) plan indefinitely, until withdrawal at retirement or early disbursement.

However, if you have fewer than $5,000 in assets in your old retirement account, your previous provider may decide to remove your assets from that plan. This is not done for malicious reasons; providers simply incur costs per account managed, and may want to cut down on these costs for a lapsed account. 
This money is still yours, but depending on the amount you have in the plan, they may choose one of two options:
1
If you have under $1,000 in your old 401(k), your provider is legally able to cash out your account and send you a check. This is not an ideal situation, because you will pay taxes on the full amount and an early withdrawal penalty of 10% - in some cases losing up to 35% of your assets.
2
If you have under $5,000 in your old 401(k), your provider is able to transfer it into an IRA in your name. This rollover would be done without tax or fear of penalty, and this IRA still belongs to you. The potential downside to this option is that the IRA your provider selects may not be your preferred IRA provider, and could have higher fees and other undesirable aspects.
If you have under $5,000 in your old retirement account, we recommend using Manifest’s transfer process to either roll this money into your current retirement plan, or into an IRA of your choosing. 
The frequently asked questions, or FAQs, are intended to be helpful and to get you thinking in a more sophisticated manner about your account transfer and related issues. However, these are not meant for accounting, tax, finance, or legal advice, not intended to be exhaustive, and do not create any relationship or duty on our part to assist your particular situation. We offer no warranties on the accuracy or completeness of the information as there could be developments of any kinds, including, but not limited to, any changes in relevant laws and regulations.