Time & Attendance
By Staff Report
Mar. 19, 2010
More people are rolling over their 401(k) savings into IRAs when they leave their jobs or retire, according to research published Wednesday, March 17, by Charles Schwab & Co. Inc.
The research found 69 percent of assets held by 401(k) participants were distributed from former employers’ plans within 12 months of leaving a job, confirmed Eric Hazard, a spokesman for Schwab. Thirty-one percent kept their money in their former employer’s 401(k) plan.
Of the assets that were moved, 80 percent were rolled over into IRAs, 10 percent were taken in cash distributions, 8 percent were moved into new employer plans, and 2 percent were taken in other forms of distributions, according to a Schwab statement on the report.
The research was based on records of 12,198 employees who left jobs in the fourth quarter of 2008; Schwab then checked where the employees had distributed their 401(k) assets by the end of 2009. The data were obtained from a database of 1.5 million participants in Schwab-administered 401(k) plans, Hazard said.
“We are definitely seeing an uptick in the number of 401(k) plan participants who choose to roll over plan assets instead of cashing out or leaving savings with a previous employer,” Catherine Golladay, vice president of 401(k) advice and education at Schwab, said in the release.
In an earlier study, Schwab found that among participants who left an employer in the first quarter of 2008, 57 percent of assets were moved out of a former employer’s plan by the first quarter of 2009, while 43 percent of assets remained in the plan, the news release said.
Of those distributed assets, 75 percent were rolled over into IRAs, 14 percent were taken as cash distributions, 7 percent were transferred to new employer’s plans, and 4 percent were taken in other forms of distributions, Hazard said.
Schedule, engage, and pay your staff in one system with Workforce.com.
ComplianceMinimum Wage by State (2023)
federal law, minimum wage, pay rates, state law, wage law compliance
Staffing Management4 proven steps for tackling employee absenteeism
absence management, Employee scheduling software, predictive scheduling, shift bid, shift swapping
Time and Attendance8 proven ways to reduce overtime & labor costs (2023)
labor costs, overtime, scheduling, time tracking, work hours