• A lump sum – Employee can choose to receive his/her benefits as a single payment from plan, effectively cashing out his/her account. He may need to pay income taxes on the amount he receive, and possibly a penalty.
• A rollover to another retirement plan – Employee can ask employer to transfer his/her account balance directly to his/her new employer's plan if it accepts such transfers.
• A rollover to an IRA – Employee can ask his/her employer to transfer his/her account balance directly to an individual retirement account (IRA).

If Employee account balance is less than $5,000 when employee leave the employer, the plan can make an immediate distribution without employee consent. If this distribution is more than $1,000, the plan must automatically roll the funds into an IRA it selects, unless employee elect to receive a lump sum payment or to roll it over into an IRA employee choose.The plan must first send employee a notice allowing employee to make other arrangements, and it must follow rules regarding what type of IRA can be used (i.e., it cannot combine the distribution with savings employee have deposited directly in an IRA).Rollovers must be made to an entity that is qualified to offer individual retirement plans.

Also, the rollover IRA must have investments designed to preserve principal. The IRA provider may not charge more in fees and expenses for such plans than it would to its other individual retirement plan customers.

Please note:If employee elect a lump sum payment and do not transfer the money to another retirement account (employer plan or IRA other than a Roth IRA), employee will owe a tax penalty if employee is under age 59½ and do not meet certain exceptions.

In addition, employee may have less to live on during his/her retirement Transferring his/her retirement plan account balance to another plan or an IRA when employee leave job will protect the tax advantages of employee account and preserve the benefits for retirement