There are other factors that can play into whether a participant remains in their plan:

Retirees and pre-retirees who have contributed to their DC plans for 20 years or more are significantly more likely than others to leave the money in the plan and remain committed to doing so. Most of these long-tenured individuals have stronger relationships with both the employer and plan provider.
Former employees of education, nonprofit and public-sector employers are significantly more likely than former employees of private-sector employers to leave their money in the plan. For example, among public sector workers, 50 percent of assets were retained in plan and committed as compared to private sector workers at small companies (under 100 employees), where only 14 percent of assets were retained and committed. Among former private-sector workers, in-plan retention improves with increased employer size.
Individuals who left money in the plan but are not committed to keeping it there, or have rolled their money out, had lower satisfaction levels with the plan provider than those who rolled to retail products or are committed to remaining in the plan. Plan providers that contact participants frequently and establish a positive relationship are more likely to develop a higher satisfaction rate and therefore retain more assets.
Individuals with financial advisors/planners are less likely to keep their assets with the provider of the employer-sponsored plan. LIMRA recommends plan providers offer consultations with an affiliated financial professional, which, when used by a participant, improved the amount of retained and committed assets compared to those who used an independent advisor.

"Time is of the essence," said Drinkwater. "As we have seen in prior studies, half of all assets represented by those surveyed were distributed within 12 months. It is critical to engage retirees and terminated pre-retirees as early as possible to have a chance of retaining their assets."

Instant Insights /

Employer outreach best way to keep retiree plan assets

More From HR Executive

Related Stories

Recommended For You