Lump-Sum Distributions
20 Pages Posted: 19 Dec 2005
Abstract
This paper focuses on the decisions that workers make upon receipt of a lump-sum payment from an employment-based retirement plan: rolling the account balance over to another tax-qualified savings vehicle, spending the assets, or investing the assets in another manner. The number and amounts of lump-sum distributions are estimated, followed by a discussion of what individuals are doing with these distributions and analysis of important determinants of the decision to roll over the distribution versus using the assets for other reasons. These results are derived from recently released data from the U.S. Census Bureau - the Pension and Retirement Plan Coverage Topical Module 7 of the 2001 Survey of Income and Program Participation (SIPP) - which includes lump-sum data for individuals through 2003. This paper updates prior studies on lump-sum distributions done by the Employee Benefit Research Institute.
Keywords: Employment-based benefits, Lump-sum distributions
JEL Classification: D31, J26
Suggested Citation: Suggested Citation
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