Auto Portability - Recent Developments
Find the most-recent auto portability media coverage and developments.
In his 7/26/18 article in BenefitsPRO, RCH's Tom Hawkins addresses the dual problems of missing participants and 401(k) cashouts, which both share common causes – a mobile American workforce and a lack of retirement savings portability. While missing participants are bad and have been receiving a great deal of attention, the issue of 401(k) cashouts is actually much worse, as annual cashouts outpace new missing participant accounts by a factor of almost 25-to-1. Fortunately, retirement savings portability, in the form of auto portability, delivers a “two-fer” by providing a strategic solution to both.
401k Specialist features a July 2018 article by RCH's Tom Hawkins, addressing recent public policy activities on the issue of retirement savings portability. In his article, Hawkins examines three developments, all taking place in late June, and looks ahead to the anticipated delivery of an Advisory Opinion by the Department of Labor on auto portability.
Auto portability has become a leading retirement savings public policy initiative due to its proven ability to preserve small-balance defined contribution accounts. RCH CEO Spencer Williams summarizes new research indicating that, when it comes to women, auto portability could deliver even greater benefits by making it easier for women participants to preserve their 401(k) savings, helping put them on par with men to achieve financial wellness.
Auto portability has become a leading retirement savings public policy initiative due to its proven ability to preserve small-balance defined contribution accounts. Now, research is indicating that, when it comes to women, auto portability could deliver even greater benefits by making it easier for women participants to preserve their 401(k) savings and help to put them on par with men to achieve financial wellness.
In his latest article in Employee Benefit News, RCH Founder, President & CEO Spencer Williams urges plan sponsors to adopt two critical, but often overlooked priorities for defined contribution plans: reducing cashout leakage and enabling auto portability. Today, plan-to-plan portability is both time-consuming and expensive, resulting in a large number of stranded accounts and cashout leakage, particularly for small accounts. Citing EBRI and other research, Williams demonstrates that enabling seamless plan-to-plan portability through auto portability could dramatically improve participant outcomes, enhance financial wellness and even reduce the incidence of missing participants.
Covering the WISER forum "The Millennial Perspective: An Intergenerational Discussion on Retirement Savings", NAPA Net's Ted Godbout includes reporting on RCH EVP Tom Johnson, who wowed the WISER crowd with 401(k) cashout leakage and portability statistics. Citing data from the GAO, the EBRI Retirement Security Projection Model (RSPM) and other sources, Johnson made the point that Millennials, including gig workers, will stand to benefit greatly from retirement savings portability solutions, including auto portability.
In his weekly Anecdotal Evidence column entitled "How Much Retooling Does the 401(k) Need?", Retirement Income Journal publisher Kerry Pechter covers two important weekly events -- the ERISA Advisory Council meeting and the EBRI webinar on their Retirement Security Projection Model (RSPM). For the EBRI event, Pechter notes that auto portability is a key public policy initiative in the "EBRI super model" and cites auto portability's benefits as reducing "retirement shortages for ages 35-39 by between 17% and 23%."
As the 401(k) turns 40 years old, the Wall Street Journal’s
Anne Tergesen examines five ways that the 401(k) could do a better job of
creating retirement security, including reducing 401(k) leakage. To
address the 401(k) leakage problem, Tergesen describes Retirement
Clearinghouse’s ongoing efforts to implement auto portability, which
automatically consolidates small balance accounts and moves retirement savings
forward into a new employer’s 401(k) plan. Tergesen reports that RCH’s
CEO Spencer Williams “expects to receive the green light” from the Department
of Labor “as soon as this summer.”