Benefits January 8, 2009

More Workers Preserving Retirement Savings at Job Change

January 8, 2009 (PLANSPONSOR.com) - More workers are rolling over retirement assets when they change jobs than in past years, according to a study by the nonpartisan Employee Benefit Research Institute (EBRI).
Reported by

According to a press release, the study, “Lump Sum Distributions at Job Change,” found the percentage of those rolling over their most recent lump sum distribution to another tax-qualified retirement plan increased to 44.3% through 2006, compared with 19.3% of those who received their most recent distribution through 1993.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

The percentage of lump sum recipients whose most recent distribution went entirely for consumption was 9.2% for distributions received through 2006, compared with 22.7% for those who received distributions through 1993.

However, the study also found that about 60% of those who took a lump sum distribution did not roll all of it into tax-qualified savings. While some of the assets were spent purely on consumption, some also was used for home purchases, starting a business, or paying down debt, the press release said. Individuals up to age 65 and those with higher balances were more likely to roll over their assets.

Other study findings included:

  • Through April 2006, about 16.2 million working-age Americans reported ever having received a lump sum distribution from a retirement plan when changing jobs. The average amount of these distributions was $32,219 (in 2006 dollars) and the median (mid-point) amount was $10,000.
  • Just over 21% of the distributions were less than $2,500. Just over 16% were $50,000 or more. The rest of the distributions (about 63%) were between $2,500 and $50,000.

The study can be found in the January EBRI Notes at www.ebri.org .

«