Auto Portability - Recent Developments
Find the most-recent auto portability media coverage and developments.
On 11/25/18, Forbes contributor Robert C. Lawton provides readers with a list of the "11 most significant 401(k) plan misconceptions." In misconception #3, titled "Rolling a 401(k) account into an IRA is a good idea" - Lawton suggests that, for many, rolling over a 401(k) to an IRA may not be in their favor. When it comes to small-balance job-changers, Lawton cites the DOL's recent actions on auto portability, stating that "the Department of Labor agrees, as shown in its recent auto portability proposal."
In the wake of the U.S. Department of Labor's actions on auto portability, PLANSPONSOR's John Managaro follows up with key stakeholders affected by the program, including J.P. Morgan's Anne Lester, the Wagner Law Group and Callan's Jana Steele, who concludes that "auto-portability is the next natural extension of highly successful plan design innovations from the past decade."
Inc.: Switching Jobs? Your 401(k) Balance Could Be Automatically Transferred Under a New Federal Rule
Inc. features a syndicated piece by Myles Ma, originally published in Policygenius Magazine, examining the Department of Labor's recent, favorable actions on the RCH auto portability program. Taking a balanced approach, Ma explains the importance of the auto portability program in helping solve the "cash-out crisis", discusses how the program works, consults experts for their opinion and notes the public comment period, which ends Dec. 24th.
In his 11/19/18 opinion piece in The Hill, former U.S Treasury official and senior fellow in economic studies at The Brookings Institution Mark Iwry writes about his personal, 22-years long advocacy for 401(k) portability, dating back to the Clinton administration. Not much had changed in that time, says Iwry, until last week's guidance by the Department of Labor (DOL) on auto portability, led by the efforts of RCH executives Spencer Williams and Tom Johnson. With the way cleared by the DOL, Iwry notes that auto portability's success will now depend on the "willingness of recordkeepers...to cooperate so participants can enjoy expanded portability."
The 401k Wire's Neal Anderson speaks with Retirement Clearinghouse (RCH) President & CEO Spencer Williams to get the scoop on RCH's industry outreach and alliance-building activities, in the wake of recent favorable actions from the Department of Labor on the RCH auto portability program. Williams highlights some of the key conditions embedded in the Advisory Opinion and proposed transaction exemption, adding "we are thrilled to that we have these opinions" and "we're thrilled that the department recognized the public interest in auto-portability."
The editors of Arkansas Business, in a humorously-titled editorial piece, note the inherent cynicism of journalists, but find some "reasons for cheer, and in time for Thanksgiving." First among their cheery topics is the U.S. Department of Labor's "experiment" to "reduce 401(k) leakage by allowing (Retirement Clearinghouse) to automatically transfer departing employees' accounts to their new employers' plans, what's called auto-portability."
In their feature story marking the 40th anniversary of the 401(k), Barron's reporter Sarah Max takes a look at the past, present and future of the now-legendary plan brought to life by the Revenue Act of 1978. Although the "401(k) has been a huge success" Max identifies leakage as a persistent problem and notes the recent emergence of auto portability as a going-forward solution to the problem.
As part of their overall feature "40 Years of the 401(k) - The Good, the Bad and the Future", Barron's reporter Sarah Max examines 5 initiatives that could help "fix" the 401(k). At the top of her list is auto portability, which Max indicates could "reduce leakage that occurs when employees cash out of small plans." Other initiatives also mentioned include multiple employer plans (MEPs), the Automatic Retirement Plan Act of 2017 (ARPA), Guaranteed Retirement Accounts, and Icon.