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401(k) cash out leakage blog posts
In his latest Consolidation Corner article, RCH President & CEO Spencer Williams examines the current state of financial wellness programs, and the challenges plan sponsors face in quantifying their benefits. Facilitating retirement savings portability, writes Williams -- whether through auto portability for small balances or an assisted roll-in program for larger balances -- can overcome this challenge by offering sponsors a financial wellness initiative that preserves participants' retirement savings and is easily quantifiable.
Writing in RCH's Consolidation Corner blog, RCH President & CEO Spencer Williams observes that safe-harbor IRAs -- created by the EGTRRA-mandated automatic rollover process -- were never intended to be "permanent retirement savings vehicles." Too often, argues Williams, the relief plan sponsors realize from automatic rollovers comes at the expense of participant outcomes -- who experience high levels of cashouts, low investment returns and savings-depleting fees. With the advent of auto portability, participants will spend less time in a safe harbor IRA, and "plan sponsors no longer have to consider trading participant outcomes for administrative convenience."
In the fifth installment of his five-part series on 401(k) cashout leakage, RCH's Tom Hawkins addresses auto portability, a solution that not only makes sound business sense, but delivers a positive societal impact for the corporations adopting it. Citing the recent Statement of Purpose from members of the Business Roundtable, Hawkins believes that as these socially-conscious corporations examine auto portability, they’ll quickly become convinced that auto portability is both a sound business decision, as well as the right thing to do.
In his five-part series in Consolidation Corner, RCH's Tom Hawkins sheds light on the problem of cashout leakage, a silent crisis that unnecessarily robs millions of Americans of their retirement security. In his fourth article in the series, Hawkins addresses policies with the most promise to reduce the 401(k) cashout leakage problem.
In his latest article, RCH President & CEO Spencer Williams takes on cash-out leakage -- which remains a big problem for the U.S. retirement system. Citing research that examines auto portability in tandem with various legislative proposals to help Americans save more for retirement, Williams makes the case that, with auto portability, millions of participants will no longer find cashing out to be the easiest option when they switch jobs, and will preserve their retirement savings instead.
In his five-part series in Consolidation Corner, RCH's Tom Hawkins sheds light on the problem of cashout leakage, a silent crisis that unnecessarily robs millions of Americans of their retirement security. In his third article in the series, Hawkins examines the magnitude of the 401(k) cashout leakage problem, sharing new statistics recently supplied by EBRI, and offering some interesting comparisons so the reader can fully-grasp the enormity of the problem.
In his five-part series in Consolidation Corner, RCH's Tom Hawkins sheds light on the problem of cashout leakage, a silent crisis that unnecessarily robs millions of Americans of their retirement security. In his second article in the series, Hawkins examines the demographics of 401(k) cashout leakage, identifying those segments of the population most impacted by the problem, as well as those who stand to benefit the most from a solution.
In his latest article in Consolidation Corner, RCH President & CEO Spencer Williams identifies a key, missing element in pending retirement legislation: provisions to plug cash-out leakage. Citing both the SECURE Act of 2019 and the Automatic Retirement Plan Act of 2017 (ARPA), Williams applauds their commendable goals to expand coverage, but takes them to task for failing to incorporate provisions that plug leakage. To make his case, Williams cites two recent EBRI studies, both finding that auto portability – when combined with legislative proposals that expand access – vastly improves their public policy benefits by stemming leakage and by dramatically reducing the nation’s retirement savings shortfall.