PSNC 2017: Working With Departed and Retired Participants

Speakers at the PLANSPONSOR National Conference discussed how plan sponsors can help terminated and retired participants make smart withdrawal decisions.

By Amanda Umpierrez | June 15, 2017
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Early in the 2017 PLANSPONSOR National Conference panel, “Working With Departed and Retired Participants,” a live polling question found equal amounts of plan sponsors are maintaining, neglecting or deciding whether to keep terminated and/or retirement participants’ assets in their plan.

Among plan sponsors, 29% are preserving these assets, while an additional 29% are not. Another 29% answered they “don’t know,” while the remaining percent voted it “depends on asset amount.” 

William Beardsley, senior vice president of LPL Financial, mentioned that for most terminated and/or retired participants, they choose to stay in the plan. Keeping assets in the plan can help plan sponsors with economies of scale to get lower administrative fees. On the other hand, some employees decide taking their assets to a new employer or an individual retirement account (IRA) is the best decision.

“It really is up to that individual employee,” Beardsley said. “They should get good guidance and assistance from a third-party.”

Jean Roma, director of US Retirement and International Benefits at Citi, agreed with Beardsley, and mentioned how participants who understand their actions won’t face troubles regarding retirement assets. 

“As long as people know what they’re doing, they’ve looked at fees and options with how they’re going to rollover, then that’s fine,” she said.

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