Auto Portability's Foundational Research
Auto portability is supported by a broad base of empirical research that clearly demonstrates the problems facing American workers (job-changing, systemic friction and 401k cashout leakage) as well as the solution: moving retirement savings forward when participants change jobs.
In his December 1, 2015 article (The unintended consequence of 401(k) auto-enrollment), RCH CEO Spencer Williams exposes the linkage between auto enrollment and lower average account balances. Based on Form 5500 data, Williams' analysis presents some excellent examples of industries where average balances are significantly lower in plans that have adopted auto enrollment compared to plans that have not. RCH's Tom Hawkins follows up that article with his own analysis, extending Williams' earlier work.
In conjunction with Boston Research Technologies, Retirement Clearinghouse (RCH) announced the findings of a groundbreaking research study on America's mobile workforce, providing insights into participant behaviors regarding retirement savings portability. The study offers plan sponsors with strategies to stem cashouts and to improve retirement outcomes.
A groundbreaking research study finds that retirement plan participants are overwhelmingly receptive to using their 401(k) plans as their primary retirement accounts during their working years—particularly Millennials and Generation-Xers—but they find the roll-in process confusing, difficult to decipher and time-consuming.
A February 2015 Center for Retirement Research at Boston College analysis of the impact of leakages on retirement assets.
The GAO's 2014 report to Congress examined “forced transfers” and inactive accounts, concluding that greater protections are required. The report cited a “clearinghouse” as a means of achieving a “money follows the participant” objective.
The 2013 Vanguard study "How America Saves 2013" provided an important view into the cashout behaviors of a large portion of America's 401(k) savers and helps form the foundation of research that supports the need for retirement savings portability, and for auto portability in particular.
A Boston Research Group case study validates the RCH business model, which delivers portability and consolidation, while reducing cash outs and leakage.
A Boston Research Group study validates that a 50% reduction in cashout leakage could be achieved by implementing a program of retirement savings portability.