Public Policy

How 401(k) Auto Portability Boosts Women's Retirement Savings

Writing in Kiplinger, RCH and PSN President Spencer Williams offers readers his views on the potential benefits of auto portability for women. While women face significant disparities in earnings, Williams notes that those disparities also drive a "lower amount of retirement benefits women earn compared to men" and cites research suggesting that "over the course of a generation, 116 million women will cash out nearly $290 billion in retirement savings." Conversely, if auto portability were widely adopted, Williams writes that "111 million women would preserve $753 billion (measured in today’s dollars) in our nation’s retirement system."

What Do PSCAers Want From Washington?

The 401kWire's Neal Anderson reports from the PSCA National Conference, where influential plan sponsor members attended a "build-a-bill" session, where they were live-polled on the things that they would like to see come out of Washington. 64% of those sponsors who were polled indicated that they would like to see an "auto-portability mandate" emanate from federal lawmakers.

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ERISA and Auto Features: An RSPM® Analysis of the Impact of Automatic Features on Retirement Security

The Employee Benefit Research Institute (EBRI) released Issue Brief No. 630, authored by Craig Copeland, Ph.D. The analysis utilizes EBRI's Retirement Security Projection Model (RSPM), which focuses on the impact of key "automatic" features, including auto enrollment, auto escalation -- and more recently -- auto portability. For auto portability, EBRI's analysis reveals that, in the 100% adoption scenario, there is an 11.39% reduction (improvement) in the retirement savings shortfall for the ages 35-39 cohort, and correspondingly, a 3.51% improvement in the retirement readiness rating for the same cohort.

The Saver’s Match and Auto Portability: A Powerful Combination

Writing in 401k Specialist, RCH's Tom Hawkins addresses two groundbreaking retirement savings initiatives could be poised to converge, potentially revolutionizing the way Americans save for retirement. The Saver's Match program, set to debut with the 2027 tax year, and auto portability, powered by the Portability Services Network (PSN), present a unique opportunity to address long-standing challenges in the retirement system. "By leveraging the strengths of both programs", Hawkins writes, "we can create a more robust and efficient retirement savings ecosystem that benefits millions of American workers."

More SECURE 2.0 Retirement Enhancements Kick in This Year

Writing in Kiplinger's Personal Finance, Mike Dullaghan, Director of Sales Execution for Franklin Templeton, runs down the new SECURE 2.0 provisions that will become fully-enabled in 2025. Dullaghan informs readers that the auto portability provision "makes it easier to transfer your retirement savings from one employer’s plan to another when you change jobs. It helps ensure that your retirement savings stay with you, no matter where you work."

Stage is set for improving retirement readiness beyond ERISA milestone

Writing in Employee Benefits News, Retirement Clearinghouse (RCH) and Portability Services Network (PSN) President & CEO Spencer Williams looks to the past and has his eye on the future, as ERISA celebrates its 50th anniversary. Williams chronicles key participant-centric technologies that have emerged, including daily valuation, automatic enrollment and target date funds. Looking ahead, Williams points to the most impactful developments, including the formation of the Portability Services Network, which has embraced auto portability, “making it easy for participants to bring their retirement savings with them from job to job until retirement” and “optimiz[ing] what auto enrollment and target-date funds can do for American workers saving for retirement.”

Is It Time to End the 401(k)?

Writing in Think Advisor, Melanie Waddell addresses the controversial stance taken by academic Shlomo Benartzi, who blasts the 401(k) system's lack of portability, pointing to the Australian model as worthy of consideration for replacing 401(k) plans. Other industry observers are not too keen on Benartzi's idea, including Nevin Adams, who cites the Portability Services Network's embrace of auto portability, which "already connect[s] a half dozen of the nation's leading recordkeepers to facilitate exactly the type of job-to-job plan transfer Benartzi seems to think only a centralized government pool could accomplish."

Et tu, Shlomo?

Nevin Adams, writing in NAPA Net, takes on a leading behavioral science academic, Shlomo Benartzi, for his advocacy of "creating big government-run pools of retirement savings — where ALL retirement savings would be put." As a viable alternative to this "truly scary idea" Adams cites auto portability, noting that it's "an emerging capability — via networks like the Portability Services Network that already connect a half dozen of the nation’s leading recordkeepers to facilitate exactly the type of job-to-job plan transfer Benartzi seems to think only a centralized government pool could accomplish."