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Research Center

The SPWG serves as a central repository for thought leadership related to retirement savings preservation. Many of the key studies and reports are below.  Contact us here to suggest papers or studies for inclusion.

A Retirement Security Retrospective: 2007 vs 2017

Transamerica Institute

"Among workers, in 2017 TCRS’ annual retirement survey found that retirement confidence had recovered and slightly surpassed its 2007 pre-recession levels. Among those offered a 401(k) or similar plan by their employers, plan participation rates and contribution rates remain strong. Among all workers, household retirement savings have dramatically increased since 2007, although retirement plan leakage in the form of plan loans and early withdrawals is an issue. An ongoing opportunity for workers is to further engage in retirement planning-related activities."

Potential vs. Realized Savings under Automatic Enrollment


"Comparing employees hired in the 12 months after the introduction of automatic enrollment to those hired in the 12 months prior, we find that automatic enrollment increases total potential retirement system balances by 7% of starting pay eight years after hire; at the same time, leakage in the form of outstanding loans and withdrawals that are not rolled over into another qualified savings plan also increase by 3% of starting pay, offsetting approximately 40% of the potential increase in savings from automatic enrollment."

An Analysis of Retirement Models to Improve Portability and Coverage

Center for Retirement Research at Boston College

"The lack of portability is caused largely by administrative barriers to moving money from one 401(k) plan to another, which is often the best choice for mobile workers. Without easy portability, money either becomes stranded in small accounts or moves either involuntarily or voluntarily to IRAs. The retail IRA market is characterized by less protective regulation, possible conflicts of interest, and higher fees. Finally, the combined workplace/IRA system allows ample access to assets before retirement through cashouts and in-service withdrawals. While some access to retirement savings may well be desirable, the current environment reduces 401(k)/IRA wealth at retirement by about one quarter."

What Moves the Retirement Readiness Needle: Quantification of Risk and Evaluation of New Proposals

Employee Benefits Research Institute (EBRI)

"VanDerhei’s analysis finds that the effect of retirement plan leakages varies by income and type of leakage, but that clearly the lowest-income quartile is most adversely affected (the population simulated consists of workers currently ages 25–29 who will have more than 30 years of simulated eligibility for participation in a 401(k) plan)...."

Reducing Retirement Savings Leakage

Employee Benefits Research Institute (EBRI)

"A 2014 analysis by EBRI found that approximately two-thirds of the impact of diminished retirement savings due to leakage was associated with the cashouts that sometimes occur at job change. Others have pointed out that 401(k) loans, which sometimes are criticized as a significant source of retirement savings leakage, actually account for the smallest amount of pre-retirement savings loss."

Borrowing from the Future: 401(k) Plan Loans and Loan Defaults

National Bureau of Economic Research (NBER)

"Our administrative dataset tracks several hundred plans over 5 years, showing that 20% borrow at any given time, and almost 40% do at some point over five years. Employer policies influence borrowing behavior, in that workers are more likely to borrow and borrow more in aggregate, when a plan permits multiple loans. We estimate loan default 'leakage' at $6 billion annually, more than prior studies."

The Impact of Leakages on 401(k)/IRA Assets

Center for Retirement Research at Boston College

"Leakages from 401(k)s/IRAs are a serious concern, given that these assets are the only significant retirement saving outside of Social Security for most workers. In-service withdrawals and cashouts appear to represent the biggest sources of leakage. Overall, leakages appear to reduce aggregate 401(k)/IRA retirement wealth by about 25 percent."

The Mobile Workforce’s Missing Participant Problem

Retirement Clearinghouse (RCH)
Boston Research Technologies (BRT)

"First of its kind research that explores the scope of the mobile workforce missing participant problem with retirement plans." "One third of participants learned of a retirement account with a previous employer they did not realize they had; 50% of Millennials indicated as such."

Policy Changes Could Reduce the Long-Term Effects of Leakage on Workers’ Retirement Savings 

Government Accountability Office (GAO)

"GAO is suggesting that Congress consider changing the requirement for the 6-month contribution suspension following a hardship withdrawal. In addition, GAO recommends that the Secretary of Labor promote greater participant education on the importance of preserving retirement savings, and that the Secretary of the Treasury clarify and enhance loan exhaustion provisions to ensure that participants do not initiate unnecessary leakage through hardship withdrawals."

Focus On . . . Retirement Plan Leakage

Journal of Pension Benefits

Compares the 2009 GAO Report with the 1998 DOL report from the Working Group on Increasing Pension Coverage and notes that:
• The Working Group "did not find hardship withdrawals to be a significant source of leakage;"
• There should be more participant education about keeping their assets in their employer's plan; and
• The working Group recommended that all DC plans "be required to accept rollovers of cash from other plans."

Leakage of Participants’ DC Assets: How Loans, Withdrawals, and Cashouts Are Eroding Retirement Income 

AON Hewitt

"This report explores the magnitude of the [leakage] problems, their impact to participant savings and ideas to curb these behaviors. More than 1.8 million employees were examined across over 110 large defined contribution plans. Participant data was analyzed through year-end 2010. Additionally, the Aon Hewitt 2010 Employer Perspectives on Defined Contribution Plan Leakage Survey was deployed in October 2010 to gauge employer sentiment and plans related to leakage issues (in total, 200 plan sponsors responded). Finally, Employee Benefit Research Institute (EBRI) provided modeling as to the impact of employee actions through its EBRI Retirement Security Projection Model®."

Eliminating Friction and Leaks in America’s Defined Contribution System: Fixing the Systemic Breakdowns That Impact Every Sponsor, Participant and Provider

Boston Research Technologies (BRT)

"Plan sponsors face increased costs, risks and potential liability resulting from cash-outs, stranded accounts and missing participants. According to surveys, sponsors are concerned about the gap and would welcome a solution. Participants – facing the 'friction' that results from complex rollover procedures and an absence of assistance – take the path of least resistance and prematurely cash out at alarming rates, depleting their retirement savings and often regretting their decisions in hindsight. Providers lose revenues as $1.3 trillion in assets over 10 years 'leak' from the system."

The Availability and Utilization of 401(k) Loans

Harvard Business School (HBS)

"We document the loan provisions in 401(k) savings plans and how participants use 401(k) loans. Although only about 22% of savings plan participants who are allowed to borrow from their 401(k) have such a loan at any given point in time, almost half had used a 401(k) loan over a longer, seven-year horizon. The probability of having a loan follows a hump-shaped pattern with respect to age, job tenure, account balance, and salary, but conditional on having a loan, loan size as a fraction of 401(k) balances declines with respect to these variables. Participants are less likely to use loans in plans that charge a higher interest rate, and loans are smaller when plans allow fewer simultaneously outstanding loans, impose a shorter maximum possible loan duration, or charge a lower interest rate."

Early Withdrawals from Retirement Accounts During the Great Recession

Statistics of Income Division, Internal Revenue Service

"Early withdrawals from retirement accounts are a double-edged sword, because withdrawals reduce retirement resources, but they also allow individuals to smooth consumption when they experience demographic and economic shocks. We show that pre-retirement withdrawals trended up between 2004 and 2010, but the trend is modest given the substantial early withdrawals (particularly relative to new contributions) occurring in all of those years. Early withdrawal events are strongly correlated with shocks to income and marital status, and lower-income taxpayers are more likely to experience the types of shocks associated with early withdrawals, and they are more likely to have a taxable withdrawal when they experience a given shock."

Plug the Drain: 401(k) Leakage and the Impact on Retirement

Defined Contribution Institutional Investment Association (DCIIA)

"DCIIA examines the impact of leakage factors on workers’ retirement income adequacy. We will examine how loans, hardship withdrawals, distributions and cash outs impact potential outcomes. Contrary to many assumptions around leakage, the DCIIA research points to trends around cash outs and distributions to be the most harmful of the leakage points. Finally we will provide recommendations on steps plan sponsors can take now to prevent retirement savings leakage."

Making the Right Choice the Easiest Choice: Eliminating Friction and Leaks in America’s Defined Contribution System

Boston Research Technologies (BRT)

"This paper continues the reporting of research, initially undertaken in 2013, to examine the nature and effects of friction encountered by employer-sponsored retirement plan participants at the time of a job-change, including an examination of the facts, circumstances and behaviors observed when a worker confronts the decision of what to do with their retirement account."

Actionable Insights for Your Mobile Workforce: Portability Solutions Key to Improving Retirement Outcomes

Retirement Clearinghouse (RCH)
Boston Research Technologies (BRT)

"A groundbreaking research study finds that retirement plan participants are overwhelmingly receptive to using their 401(k) plans as their primary retirement accounts during their working years—particularly Millennials and Generation-Xers—but they find the roll-in process confusing, difficult to decipher and time-consuming. Among a host of new insights, key findings include:

  • A majority of retirement plan cash-outs are unnecessary—a product of convenience rather than need.

  • A large majority of separated participants intend to move their accounts from their former employers’ plans.

  • A significant percentage of respondents rate employer-sponsored roll-in services as an excellent benefit.

The survey further presents specific recommendations for plan design, including a multi-pronged approach to dampen cash outs and to dramatically improve plan portability."

Research Center: Files
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