Public Policy

Enhancing Financial Security for the Long Term

SHRM's Stephen Miller writes about the "technological breakthroughs, red-tape-cutting legislation and new initiatives from service providers" driving big changes for defined contribution plans that will "provide larger nest eggs for employees' retirement years." Miller identifies auto portability -- as delivered by the Portability Services Network -- as one of his four "megatrends" that will bring about dramatic changes. In the piece, Miller offers readers a primer on the key factors driving auto portability and turns to RCH EVP Neal Ringquist and Alight Solutions' Alison Borland for their views on the adoption of the emerging financial technology.

Industry-led auto-portability network ready

Pensions & Investments Washington reporter Brian Croce covers the official October 2023 "go live" date for auto portability, via the industry-led Portability Services Network, and presents a uniformly positive view of the industry network, as well as the go-forward prospects for auto portability. Croce includes extensive quotes from key representatives of the consortium, including Fidelity's Dave Gray, Alight's Greg Long, Vanguard's Steve Holman, as well as RCH's Spencer Williams and Neal Ringquist. Croce also turns to industry voices, including PSCA's Executive Director Will Hansen and EBRI's Craig Copeland.

Safeguarding Retirement Savings: Inside Secure Act 2.0 Key Priorities

BDO Alliance USA, among the industry’s largest associations of accounting and professional service firms, evaluates key priorities contained within recent SECURE 2.0 legislation, and includes an analysis of Section 120 of the act, which addresses auto portability. The piece notes that the auto portability "provision enhances portability by allowing the plan sponsor to now transfer the former employee’s default IRA assets (established at termination) into the participant’s new employer’s plan. The provision both curtails asset leakage from ERISA plans and helps alleviates the missing participant issue." The article also notes a related provision of the legislation -- Section 304 -- that increases the dollar limit for plan sponsors to automatically cash out a former employee’s retirement plan from $5,000 to $7,000, starting in 2024.

Leveraging SECURE 2.0 to Earn More 401(k) Business

Writing in NAPA Net, 401(k) Marketing's founder & CMO Rebecca Hourihan offers tips to plan advisors on how they can leverage awareness of SECURE 2.0 provisions to update plan fiduciaries and earn more 401(k) business. Hourihan focuses on components of SECURE 2.0 that deal with small account balances, including an increase to allowable safe harbor IRA balances and auto portability, as delivered by "a network of recordkeepers." Hourihan suggests that advisors "discuss the benefits of adding....auto-portability to plans now" and comes down firmly on the side of plan-to-plan consolidation, counseling advisors "to help employees consolidate accounts and encourage more assets into the plan" by incorporating "strong calls-to-action during enrollment and education meetings."

The Impact Of SECURE 2.0 On Americans’ Retirement Readiness

Writing in Private Wealth Magazine, noted private wealth expert Russ Alan Prince interviews Neal Ringquist, RCH's EVP and Chief Revenue Officer, about which SECURE 2.0 provisions Ringquist feels will impact retirement savings most, and what advice advisors should give their clients regarding these provisions. In the interview, Ringquist draws attention to SECURE 2.0 provisions that codify auto portability, as well as the related provision that increases the limit on 401(k) account balances that can be automatically cashed out by sponsors and recordkeepers and transferred to default IRAs, from $5,000 to $7,000. Ringquist offers Prince a compelling primer on why these provisions will reduce cashout leakage, benefitting plan sponsors, participants and the advisors who serve them.

The 401(k) ‘House-Cleaning’ to Come

The increase in the automatic rollover threshold from $5,000 to $7,000, as provided for in section 304 of the SECURE 2.0 legislation, will become effective for mandatory distributions made after December 31, 2023. What will be the impact of these provisions, if fully embraced by plan sponsors? One thing is certain – on both a one-time and ongoing basis, far more terminated participants will be subject to the automatic rollover provisions of their former-employers’ plans. Writing in 401k Specialist, RCH's Tom Hawkins explores the impact of an increased threshold that, when paired with the advent of auto portability and the operational status of the Portability Services Network (PSN), could mean that small balance terminated participants will finally come out on top.

Rapid Change, Real Momentum: Assessing America’s Progress Toward Inclusive Retirement Savings

In October 2022, policymakers, financial services executives, academics, advocacy leaders, and financial technology innovators gathered for the sixth annual Aspen Leadership Forum on Retirement Savings. An in-person event for the first time since early 2020, this Forum set out to advance solutions to ensure that everyone in America can benefit from our retirement savings system. The just-released report from that meeting identifies retirement plan portability as vital to addressing the problem of job-changing and cashout leakage, and the report heaps superlatives on the newly-formed Portability Services Network, an industry-led consortium dedicated to the adoption of auto portability.

This simple way to fix the wealth gap between Blacks and Whites is far better than reparations

Fox News Senior Political Analyst Juan Williams, prominently featured on live network TV, writes a FoxNews.com opinion piece, where he profiles entrepreneur Robert L. (Bob) Johnson's "better idea" for closing the racial wealth gap -- auto portability. Williams heaps praise upon Johnson and auto portability, which was brought into existence following Johnson's hire of "a veteran retirement industry executive, Spencer Williams, to create the structure for seamless transfer of 401(k) accounts." In the piece, Williams characterizes auto portability as being able "to increase Black wealth through current economic rules instead of placing distant hope in some day seeing reparations."

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