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Job hoppers ignore 401(k)
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April 19, 1999: 2:07 p.m. ET
Survey shows that cash is biggest motivator, retirement plans cast aside
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NEW YORK (CNNfn) - When it comes to changing jobs, retirement planning appears to have taken a back seat to shorter term career goals on the list of decision-making criteria, a new survey shows.
Fidelity Investments, the nation's largest mutual fund company and survey-sponsor, reports that 30 percent of full-time American workers cited pay as the most important factor for switching jobs, while 17 percent identified professional development. About 12 percent pointed to job security and 9 percent considered health insurance a key factor.
At the same time, 24 percent of those surveyed reported being "not very" or "not at all" aware of their options for their 401(k) plan. Those include maintaining it in a previous employer's plan, rolling it over to a Rollover IRA or to a new employer's plan, or taking a cash distribution.
About half of respondents reported being "somewhat aware" of their options and 30 percent reported being very aware.
According to the results, job changers were most aware of their option to take a cash distribution of the savings - which can be the worst of all available options.
"These results show two significant things: Overall, Americans are most aware of the cash distribution option for their 410(k) when they change jobs - which could be the least advantageous of the four choices - and, the people who are most focused on making a decision about switching employers are less knowledgeable about their 401(k) options in general," said Laura Groark, vice president of Fidelity.
Moreover, when Fidelity asked the respondents who said they knew what a Rollover IRA was -- about 80 percent of all respondents -- only about one-third of them could accurately describe it.
For the survey, Fidelity took a national sample of adults who reported being employed full-time or actively seeking full-time employment. Fidelity focused on employees with 401(k) plans, who reported an imminent or recent job change.
Groark noted that nearly one-third of all adults in the full-time job market reported a recent or imminent change.
It appears, she said, "that job changers may be confident about the present availability of jobs and income - and in fact, they are very specific about what they want and need in the near future from their employment. But it is important for them to focus on long-term security and income after retirement - and some American workers are not particularly knowledgeable about the ways they can reach longer term financial goals through employment." 
--by staff writer Shelly K. Schwartz
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