According to a new Government Accountability Office (GAO) report, only a third of plan participants receive an important notice that could help them make a decision about their retirement savings.<\/p>\n
The GAO claims that about 80% of eligible 401(k) participants aren\u2019t aware of all four of their distribution options after terminating employment, which are 1) if above the plan cash out limit, leave the retirement savings in the former employer\u2019s plan, 2) roll the money to the new employer\u2019s plan, 3) roll the savings into an IRA, and, 4) take a lump sum taxable distribution.<\/p>\n
My two cents are that it\u2019s the result of the legalese of the 402(f) notice that participants are supposed to get. I always felt it\u2019s written an ERISAese and an executive summary for someone who isn\u2019t a tax expert would go a long way.<\/p>\n
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