Nicholas Pension Consultants
ERISA Services, Inc.
Nova 401(k) Associates
The Retirement Plan Company (TRPC)/an ABG firm
Creative Pension Consultants, Inc.
Compensation Strategies Group, Ltd.
Atlantic Pension Services Inc
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|The Impact of 'Leakage' from 401(k)s and IRAs|
Center for Retirement Research at Boston College
Feb. 3, 2015
"About 1.5 percent of assets leak out of the 401(k)/IRA system each year. Of the different forms of leakages, in-service withdrawals and cashouts appear to represent the most significant source of leakages, while loans created a measurable but relatively small leakage.... [A]ggregate 401(k) and IRA retirement wealth is at least 20 percent lower than it would have been without current leakage rules. The policy implications of the findings are:  Hardship withdrawals could be limited to serious, unpredictable hardships and the amounts distributed not subject to the 10-percent penalty.  The age for non-penalized withdrawals from both 401(k) and IRAs could be raised to at least Social Security's Earliest Eligibility Age, which is currently 62.  The cash-out mechanism could be closed down entirely, by changing the law to prohibit lump-sum distributions upon termination."
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