Employees who change jobs can have a major negative impact on defined contribution systems, according to a report by the Boston Research Group.
When employees leave, plan sponsors face increased costs, risks and potential liability resulting from cash-outs, stranded accounts and missing participants. One solution is to offer participants a seamless way to move their 401(k) savings to another retirement savings vehicle, which can help stem some of these "leakage" challenges, the report found.
Warren Cormier, president of Boston Research Group, said in the report that participants tend to take the path of least resistance when it comes to complex rollover procedures. That means they either cash out altogether or they strand their assets at their former company and forget all about them.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
- Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
- Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
