Don’t Cash Out or Leave Them Behind: A Pilot Study of a 401k Plan Transfer Digital Platform

In this study, we examined Manifest, a digital platform that makes it easier for employees to transfer 401k retirement accounts when they change jobs. Transferring accounts reduces the likelihood employees cash out and helps them consolidate their retirement savings. We examined 401k plan activity among nearly 15,000 employees of a private university over a four-year period.

Nearly a fifth (18%) of new employees transferred in plans from previous employers. The transfer-in rate was much higher among higher-paid compared to lower-paid employees. Most employees who left the university kept their plan balances with the university; only 22% transferred their plans to a new employer when they left the university and 9% cashed out their accounts. Employees with smaller plan balances were much more likely to cash out their accounts. Among 635 employees who were hired in 2019 and 2020 and offered Manifest, the transfer-in rate was 55%. Among 432 employees who had left the university within the last three years and were offered Manifest, the transfer-out rate was 81%.