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For millions of Americans, a 401(k) is the foundation of their financial future. But when employees change jobs or retire, those assets are often rolled over. How the rollover process is handled represents a pivotal moment, not just for the employee, but also for financial institutions seeking to retain and grow valuable assets.

The Rollover Tsunami: A Market Ripe for Capture

The volume of assets in motion is staggering. LIMRA (Life Insurance Marketing and Research Association) estimates retail rollover activity will reach $855 billion this year, and is projected to grow 34% to $1.15 trillion by 2030. By comparison, rollover activity was $612 billion in 2020, according to LIMRA.¹

Why do participants roll over their assets? According to a 2024 ICI Research Report², the top reasons included:

• Not wanting to leave assets behind with a former employer.
• Wanting to consolidate assets.
• Access to a broader range of investments.

Additionally, 43% of traditional IRA-owning households say they’d prefer to keep their assets with the same financial services provider. This signals a strong desire for continuity and convenience, and perfectly positions recordkeepers to retain these assets. So why let those assets walk out the door?

The Hidden Cost of Inefficiency

Despite the demand, the traditional rollover process is still slow, manual and error-prone. Paper forms, mailed checks and multiple handoffs lead to delays, frustrated participants and rising operational costs. When there are no processing delays, a 401(k) rollover can still take up to 60 days to complete, during which assets remain uninvested.

PensionBee analyzed how missing a market upturn during periods of volatility can lead to significant long-term losses. The study modeled the lost investment growth for $10,000, $50,000 and $100,000 rollovers that were out of the market for 2 weeks, 4 weeks and 8 weeks. Returns during the out-of-market periods were based on historical S&P 500 performance in late 2023, a time of high market volatility. The long-term impact was projected over 30 years, assuming a 7% annual return and a 0.85% annual IRA fee.

Key findings included³:

• For a $100,000 rollover check, being out of the market for 2 weeks during an upturn could cost $37,512 in lost returns over 30 years.
• An 8-week delay could lead to $76,000 in lost returns over 30 years.

How ÌìÃÀ´«Ã½â€™s RolloverCentral Delivers Rollover Efficiency at Scale

ÌìÃÀ´«Ã½â€™s RolloverCentral is transforming rollovers with a digital-first, integrated middleware solution that modernizes and streamlines the entire process. Here’s how it delivers meaningful results for investors and recordkeepers alike:

• Dramatically Improved Investor Experience
  • Participants complete rollovers online in under 20 minutes (no paperwork, no calls, no checks).
  • This translates to 87% faster funding, cutting timelines from 38+ days to under a week.
• Efficiencies and Cost Savings for Recordkeepers and Plan Sponsors
  RolloverCentral simplifies and automates rollover processing, cutting costs and easing operational strain:
  • $1 saved for every check eliminated, no printing, paper or postage required.
  • 18+ minutes saved per rollover in call center time, reducing rep workloads and support costs.
  • Lower fraud risk and zero manual handling with secure, end-to-end automation.
• Reduced Out-of-Market Risk
  • Faster processing means participants spend less time in cash and more time in the market, helping avoid missed investment opportunities and strengthening your firm’s brand trust.
• Asset Retention Gains
  • 42% of rollovers went to IRAs offered by the participant’s recordkeeper in 2022 (Hearts & Wallets).
  • RolloverCentral’s seamless digital process helps recordkeepers capture more of this growing retention opportunity faster.

Participants are looking for speed, simplicity and security. Institutions that streamline the rollover experience stand to capture a larger share of this multi-billion-dollar opportunity, while safeguarding both their clients’ futures and their own bottom line.

To learn about the growth potential in IRA rollovers and how a modernized process can help capture and retain these assets, watch our “Modernizing Rollovers: Powering Growth with a Smarter Strategy" video.

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