Ex-Employee Retirement Asset Decisions

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Today we will be discussing Guiding Ex-Employees on Retirement Asset Decisions.

When an employee leaves a company, they often have assets remaining in the company's retirement plan. Even if they have other options to transfer these assets, there's no rule forcing them to make a move. This is because Erisa was established to protect individuals and to ensure that companies manage plans responsibly, irrespective of an employee's active or ex-employee status. The Department of Labor considers a participant's employment status irrelevant in this context.

However, many companies actively remind ex-employees about the potential benefits of moving their assets elsewhere.

Some of these benefits include:

Consolidating Retirement Assets: Managing multiple retirement plans can be confusing. Consolidation reduces the risk of overlooking an account.

Expanded Investment Options: IRA typically offer a wider range of investment choices than company-sponsored programs.

Focused Fee Structure: Within a retirement plan, individuals often bear a portion of fees for the entire participant group. In contrast, IRA fees are solely based on individual assets.

For more information on how to best communicate with ex-employees regarding their retirement plans, contact us today.

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