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Lump sums are most common payment option for participants in defined contribution retirement plans

June 04, 2018

As workers approach retirement, they might wonder how their retirement savings will be paid out. Among private industry workers in defined contribution plans in 2017, most participated in savings and thrift plans (73 percent). Other common plan types include deferred profit sharing (25 percent) and money purchase pensions (18 percent). A lump sum was the most common payment option available to workers in these plans. A lump sum provides retiring workers the full amount of their retirement savings and earnings with no further benefits received from the plan.

Percent of participants in defined contribution retirement plans by methods of payment available, 2017
Method of payment Savings and thrift Deferred profit sharing Money purchase pension

Lump sum

86% 81% 75%


12 9 29


38 38 49

Annuity payments were available to 29 percent of participants in money purchase pension plans. That was more than the share of workers who could receive an annuity in savings and thrift plans (12 percent) or in deferred profit-sharing plans (9 percent). Annuity payments provide a periodic (usually monthly) payment for the life of the retiree.

Installments were also available to more workers in money purchase pension plans (49 percent) than to workers in savings and thrift (38 percent) and deferred profit-sharing plans (38 percent). With installment payments, the retiree receives part of the account balance in regular payments until the balance reaches zero. If the account balance is greater than zero when the retiree dies, the retiree’s beneficiaries receive the balance. Installment payments may occur monthly, quarterly, or yearly for 5 to 20 years.

These data are from the National Compensation Survey — Benefits program. To learn more, see Health and Retirement Plan Provisions in Private Industry in the United States, 2017. For definitions of the terms related to employee benefits, see the Glossary of Employee Benefit Terms.


Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Lump sums are most common payment option for participants in defined contribution retirement plans at (visited June 18, 2024).

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