Recent Developments

'Portability' is set to boost and solidify $9.3 trillion 401(k) system by eliminating cash-outs, rollovers and fragmented (orphaned) plans

RIABiz's Brooke Southall, founder of RIABiz -- described as the "news, vision & voice for the advisory community -- writes about the DOL's "proposed rule [that] would implement Section 120 of the SECURE 2.0 Act" -- known as auto portability. In his piece, Southall voices his own views, and turns to industry experts, all of whom are positive about the recent developments and the future prospects for auto portability. Southall quotes Retirement Clearinghouse (RCH) and Portability Services Network (PSN) president & CEO Spencer Williams on the benefits of auto portability, and writes that large 401(k) recordkeepers "created a consortium for portability among themselves, with the technology of Retirement Clearinghouse."

EBSA’s Lisa Gomez Calls Auto-Portability Key to Retirement Security

PLANSPONSOR's Alex Ortolani reports on commentary from Assistant Secretary of Labor Lisa Gomez, the head of the DOL's Employee Benefits Security Administration (EBSA), who highlighted efforts by EBSA to advance final rules on auto portability. The proposed rules, which hit the Federal Register Monday, initiate a 60-day comment period that will end March 29. Ortolani writes that Gomez "highlighted the [auto portability] provision as one of several into which EBSA is digging in this year."

Also featured in PlanAdviser

DOL proposes new 401(k) ‘auto-portability’ regulations for job changers

BenefitsPRO's Scott Wooldridge informs readers about "another step forward" for auto portability, when the Department of Labor's Employee Benefits Security Administration (EBSA) released its proposed rules associated with SECURE 2.0. Wooldridge provides a summary of the new rules, and quotes American Retirement Association (ARA) CEO Brian Graff as stating: “We appreciate the guidance provided by the DOL. Anything that reduces the rate of retirement plan leakage results in better outcomes for participants.”

DOL Wants to Allow 'Reasonable' Fees for Porting Small 401(k)s

Alex Padalka, writing in Financial Advisor IQ, reports on the news that the Department of Labor has proposed rules for the automatic portability of small-balance retirement accounts. Padalka notes that the SECURE 2.0 legislative mandate, when combined with the proposed DOL rules, would replace the prior regulatory-only framework granted to Retirement Clearinghouse, and further observes that, for all practical purposes, the rules would only apply to the Portability Services Network, an industry-led consortium initially formed in 2022.

Proposed federal regulation aims to help workers keep track of retirement savings when they switch jobs

Kathleen Steele Gaivan of McKnight's Senior Living reports on the 1/18/24 release of proposed regulations from the DOL's Employee Benefits Security Administration (EBSA) concerning auto portability, as required by SECURE 2.0 legislation. Gaivan writes: "[t]he proposed rule would implement Section 120 found in SECURE 2.0, which allows an automatic portability provider to receive a fee when executing an automatic portability transaction for certain distributions into Safe Harbor IRAs, through an added exemption to Internal Revenue Code section 4975."

Auto Portability Proposal Is In

PLANSPONSOR correspondent Paul Mulholland reports on the 1/18/24 development that the Department of Labor's Employee Benefits Security Administration (EBSA) has released proposed rules for automatic portability transactions. The new rules are "intended to implement a SECURE 2.0 provision to make it easier to transfer money between DC plans to limit leakage."

Also featured in PlanAdviser

Department of Labor Releases Proposed Auto-Portability Reg

NAPA Net's John Sullivan reports on the Thursday, 1/18/24 issuance of proposed regulation on automatic portability transactions under SECURE 2.0. Sullivan's piece outlines the framework of the new proposal, and includes supportive words American Retirement Association CEO Brian Graff, who states: "We appreciate the guidance provided by the DOL. Anything that reduces the rate of retirement plan leakage results in better outcomes for participants."

Also featured on ASPPA Net

DOL Proposes Regs to Help Job Changers Move 401(k)s Automatically

ThinkAdvisor's John Manganaro reports on breaking news that, on Thursday 1/18/24, "the Employee Benefits Security Administration within the U.S. Department of Labor released proposed regulations....meant to expand the use of automatic retirement account portability tools." Manganaro further reports that the new framework identifies "11 requirements under the statutory exemption that must be satisfied for the automatic portability transaction to be covered by the exemption."

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