Nearly half of defined contribution plan participants with assets in a former employer's retirement plan are highly likely to open a rollover IRA within the next 12 months, according to new research - and the demographic driving that intent is getting younger, more diverse, and harder to retain.
The findings come from the 2026 DC Participant Planscape report, published October 14, 2026, by Cogent Syndicated, a division of Escalent, a research and advisory firm headquartered in Livonia, Michigan.
The study surveyed 4,006 DC plan participants across the US between July 7 and July 28, 2026, and found that 46% of those holding former employer-sponsored retirement plan assets (averaging $90,000 per participant) are strongly inclined to initiate a rollover IRA in the coming year.
Gen Z representation among likely rollover candidates nearly doubled year-over-year, rising to 22% in 2026 from 12% in 2025, according to Escalent.
Millennials also increased their share, climbing to 44% from 37% over the same period. The candidate pool also grew more diverse, with Black and African-American participants accounting for 25% of likely candidates, up from 15%, and Hispanic and Latino participants rising to 21% from 17%.
As InvestmentNews has reported, Gen Z is already outpacing older generations in DC plan participation rates, entering the workforce with stronger savings habits than any prior cohort - a trend that now appears to be feeding directly into earlier and more active rollover consideration.
Life events, not just job changes, are driving engagement
Escalent's research identifies a behavioral distinction between younger rollover candidates and their older counterparts.
Gen Z and Millennial participants are more receptive to rollover education at moments that go beyond the traditional job-change trigger. Marriage, divorce, the birth of a child, and key career milestones all register as moments when these cohorts are open to guidance.
"Beyond job changes and open enrollment, Gen Z and Millennial participants are markedly more receptive to rollover IRA education when experiencing major life events like marriage, divorce or birth of a child or upon hitting key professional milestones," said Sonia Davis, lead report author and senior product director in Escalent's Cogent Syndicated division.
However, Davis cautioned that firms must also contend with a higher incidence of friction among these younger participants. They are more likely to feel overwhelmed by paperwork, confused by the rollover process, and concerned about making costly mistakes; barriers that could derail intent before it becomes action.
The stakes for financial advisors and retirement plan providers are rising. More than one in five participants (22%) now plan to roll assets to a brand-new firm with which they have no prior relationship, up sharply from 14% in 2024 and 19% in 2025, per Escalent. Among Gen Z participants, that figure climbs to 33%, and among Millennials to 30%.
That finding underscores what Hearts & Wallets data highlighted for InvestmentNews earlier this year: record levels of asset movement are creating both urgent opportunity and real competitive risk for incumbent providers. Firms that built relationships during a participant's accumulation years cannot assume those relationships will survive the rollover moment.
"As these generations become increasingly interested in rolling their assets, they have also become harder to keep in-house," said Linda York, a senior vice president in Escalent's Cogent Syndicated division. "To retain clients and capture rollover dollars, firms must proactively engage participants as their financial lives evolve and make rollover decisions easier to understand and act on — or risk losing the relationship they built to a competitor."
The warning carries weight. As InvestmentNews reported in June 2026, IRA assets have swelled to $19.2 trillion, driven largely by 401(k) rollover activity, reflecting both the scale of assets now in motion and the depth of competition to capture them.
For advisors, the practical implication is a need to engage clients and prospective clients well before the rollover trigger arrives, and to invest in education that specifically addresses the barriers younger participants report most often: process complexity, paperwork burden, and fear of error.
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