Lump-Sum Pension Distribution
An analysis of lump-sum pension distribution recipients
Monthly Labor Review May 2002 by James H. Moore, Jr. and Leslie A. Muller
Employer-sponsored pensions, one-third of the "three-legged stool" consisting of Social Security income, private savings, and pensions, account for almost 20 percent of aggregate income for people 65 years or older. With Social Security’s projected financial shortfall, income from pensions may play an even greater role in providing economic security in the future, especially for those without substantial private savings.
Nearly two-thirds of the individuals who received a lump-sum distribution were younger than age 40 at the time of the distribution, with the average age being 38. Three-quarters of the recipients were married at the time of the interview, and 50 percent of the sample is female.
Never-married individuals have a 6 percent greater
likelihood than married individuals of saving their distributions,
regardless of the definition of saving used, while divorced respondents are
8 percent less likely to save their lump sums, but only when defining saving
broadly.
