Almost half of public sector employees are taking no action to decumulate defined contribution plan retirement savings once retired, according to Mission Square Retirement research released this month.

Josh Franzel, managing director at the Mission Square Research Institute, says the results of their research can help plan sponsors understand how public sector participants and retirees—most of whom also have a defined benefit plan—behave regarding their supplemental defined contribution savings.

“It’s important to take a holistic view from a plan sponsor perspective in understanding how the different pieces fit together,” Franzel says.

The report, “Retirement Savings Participant Decumulation Behavior,” was written by Gerald Young, Mission Square Research Institute senior research analyst.

Mission Square studied participant disbursements, where money leaves the plan and the participant receives a direct payment, as well as transfers, where money leaves the plan and is sent to another financial institution or recordkeeper, and exchanges, where the money remains in the plan and the assets are moved from one or many funds and/or investments in the participant’s account to other funds and/or investments in the participant’s account.

According to the research, 10 years from general employees’ last contributions, 48% of plan participants had not taken any partial disbursements, and 72% had not taken any full disbursements. In contrast, 27% of plan participants took their first partial disbursement within the same year of retirement, while 11% took a full disbursement that first year.

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