Distributions from
defined contribution plans: What do workers do with their retirement nest egg after they leave their employers?

Alight’s report, studying post-termination distribution behavior over ten years, found that 40% of assets remained in the plan.

40% remain in plan

15% cash out

45% roll over

40% remain in plan

15% cash out

45% roll over

Workers with larger balances are more likely to keep assets in the plan.

<$1k in savings prior to termination

6% Remain in plan

11% Roll over

80% Cash out

3% Combination

$25k–$50k in savings prior to termination

22% Remain in plan

39% Roll over

22% Cash out

17% Combination

$250k+ in savings prior to termination

37% Remain
in plan

44% Roll over

2% Cash out

17% Combination

Among dollars rolled over into IRAs, the most popular IRA provider received 17% of assets during 2017.

Alight believes this percentage may be substantially lower than other recordkeepers.

What actions can plan sponsors take?

Benchmark your retirement plan’s data against Alight’s data.

Educate participants about their retirement plan choices.

Encourage in-plan retirement income.

For more information, see Alight Solutions’ Distributions in DC Plans report.

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