Auto Portability - Public Policy
Learn more about retirement savings public policy positions related to Auto Portability.
Employee Benefit News' Caroline Hroncich reports on the Department of Labor's issuance of a final prohibited transaction exemption (PTE) for the RCH Auto Portability program, which she characterizes as "a move which may decrease the likelihood employees cash out their retirement plans when they switch jobs." Hroncich quotes RCH Founder, President and CEO Spencer Williams, as well as Jan Jacobson, senior counsel for retirement policy at the American Benefits Council.
NAPA Net's Ted Godbout covers breaking news that the US Department of Labor has granted final approval to Retirement Clearinghouse (RCH) for a Prohibited Transaction Exemption (PTE) for the RCH Auto Portability program. As Godbout states, "the RCH Program seeks to help eliminate duplicative fees and reduce retirement savings leakage by providing individuals who are changing jobs with a way to transfer retirement assets from their prior employers’ plans to their new employers’ plans." Godbout also references the DOL's Advisory Opinion 2018-01A, issued in November 2018, and cites EBRI research indicating that system-wide adoption of auto portability for "smaller accounts alone would save $1.5 trillion."
Retirement Clearinghouse (RCH) welcomes the release of the U.S. Department of Labor’s (DOL) final Prohibited Transaction Exemption (PTE) for auto portability, issued July 31, 2019. In a press release, Robert L. Johnson, Founder and Chairman of The RLJ Companies and majority owner of Retirement Clearinghouse (RCH), along with RCH Founder, President and CEO Spencer Williams both voice their support for the DOL's guidance, which, along with their November 2018 Advisory Opinion, now completes the regulatory framework for auto portability.
In his 7/31/19 article in Consolidation Corner, RCH Founder, President & CEO Spencer Williams addresses the latest action by the U.S. Department of Labor (DOL), issuing the final Prohibited Transaction Exemption (PTE) to Retirement Clearinghouse (RCH) for the RCH Auto Portability program, completing the regulatory framework and clearing the way for auto portability’s widespread adoption
In his five-part series in 401k Specialist, 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.
PLANSPONSOR's Amanda Umpierrez reports on the major findings from the 2019 Aegon Retirement Readiness Survey, which provided a comparative analysis of retirement readiness in countries around the world. Summarizing the key takeaways for employers, Umpierrez turns to Transamerica's Catherine Collison, who suggests "that the U.S. government can require employers to offer auto-enrollment in retirement plans......and can continue efforts to implement retirement plan auto-portability."
In his latest article in Employee Benefit News, 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.
401k Specialist Editor-In-Chief John Sullivan reports on EBRI's 7/11/19 analysis of DC legislative proposals, including mandatory coverage (auto-IRAs), immediate annuities, open MEPs and changes to required minimum distributions -- all of which deliver significant retirement public policy benefits, as measured by their simulated reduction in the retirement savings shortfall (RSS). Importantly, Sullivan singles out auto portability as providing the most-impressive benefits, noting: "if a full auto portability scenario is assumed on top of all of the aforementioned changes to the retirement system, the average retirement deficit is simulated to decrease by 27.1 percent."