Leaving and Staying Put

Leaving a job is not all that unusual. But for some people, changing employers doesn’t necessarily mean severing all ties with the erstwhile office. 

The Secure Retirement Institute reports that since 2019, 26% of investors who changed jobs kept the retirement funds—all of them—in the defined contribution plan established at their former employer.

SRI says that the top five reasons that job changers kept their money in the retirement plan of their previous employer are: 

1. convenience;
2. not having made a decision about those accounts and funds;
3. good investment performance in the previous employer’s plan;
4. no current need for money; and 
5. good service from the plan offered by the previous employer. 

SRI says that based on its research, it is more likely that a former employee will keep their money in a DC plan run by the previous employer after they change jobs if they are younger or are women, or if they worked at:

• an educational institution;
• a hospital/health care organization;
• a government employer; or
• an employer with 5,000 or more employees.