Retirement Plan Cash Outs, Loans and In-service Withdrawals by Race, Ethnicity, Gender and Socioeconomic Factors
Background and Purpose
Many employees covered by U.S. retirement plans with defined contribution accounts, for example, 401(k) plans or some public defined benefit plans with employee contribution accounts. These plans often allow employees to use their retirement savings before retirement in a way that may be beneficial to employees during their working years, thereby reducing their assets available for retirement income. The loss of retirement-dedicated funds via these transactions is often referred to as leakage. In general, there are three types of these transactions: loans, in-service withdrawals, and cash-outs that are not rolled into another tax-qualified retirement vehicle. The SOA is interested in understanding the impact of these transactions on U.S. population segments of varying dimensions of diversity.
Research Objective and Deliverables
This research would deliver a report that quantifies the frequency, magnitude and impact of retirement plan cash outs, in-service withdrawals, and loan defaults on different U.S. population segments defined by race, ethnicity, gender, sexual orientation, geography, income/wealth, education, demographics, and/or other socioeconomic factors. The report may also include relationships between these transactions and plan design features, life or employment events, account balances, etc. The relationships with events and specific dimensions of diversity examined will depend on the data available to the researcher.
Target Audience and Impact
This research would provide facts that inform plan sponsors and policymakers about how the impact of plan design features on plan participants differs across various dimensions of diversity. The results could be used to inform decisions related to plan design features and educational efforts.
Estimated Cost
Varies, depending on the data elements and level of detail available.