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Auto Portability - Recent Developments
Find the most-recent auto portability media coverage and developments.
Suggest.com's Perry Carpenter points to three key factors -- including high levels of job-changing, increasing levels of auto enrollment and automatic rollovers of balances below $5,000 -- that converge to make a strong case for individuals consolidating their employer-sponsored retirement savings accounts. Carpenter finds a staunch proponent for consolidation in RCH president & CEO Spencer Williams, who states that "[f]rom a consumer perspective, the default should be 100% of the time to move your money." The piece goes on to cite four key benefits of consolidating account.
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Money, Power, Partnerships: BET Founder Bob Johnson Rallies For Blacks to Build, Preserve, and Pass Down Wealth
Black Enterprise's Derek Major reports on the fireside chat between Robert L. Johnson and Black Enterprise CEO Earl Butch Graves Jr. In the wide-ranging discussion, which is included as video in Major's piece, Johnson and Graves turn to Johnson's role in spurring the formation of the Portability Services Network (PSN), by "teaming up with Fidelity, Vanguard, and Alight Solutions—three of the nation’s largest 401(k) record keepers" to "accelerate the nationwide adoption of auto portability to help America’s underserved workers enhance their retirement finances."
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Scott Wooldridge, writing in BenefitsPRO, examines the "new partnership between 401(k) administrators could preserve more than $1 trillion in retirement savings." Utilizing RCH's auto portability solution, the new industry-led consortium will "particularly [benefit] minorities, women, and low-income workers." Wooldridge also quotes Bob Johnson, RCH Chairman, BET founder and Chair of the new Portability Services Network, praising proposed US Senate legislation, co-sponsored by Sen. Tim Scott (R-SC) and Sen. Sherrod Brown (D-OH).
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Steff Chalk, Executive Director of The Retirement Advisor University (TRAU), writes in 401kTV.com about the Portability Services Network, the newly-announced, industry-led consortium formed to accelerate the adoption of auto portability. Chalk characterizes the new entity as "a new concept for the retirement plan industry" and that "it is poised to make a big impact on plan sponsors and plan participants." Chalk also writes that RCH President & CEO Spencer Williams "has indicated that there are additional 401(k) industry stalwarts who are planning to join the collaboration."
The Penny Hoarder's senior writer Mike Brassfield reports on the 10/5/2022 announcement of an industry-led consortium to accelerate the adoption of auto portability. Brassfield acknowledges the setbacks that ultimately face participants who fail to preserve their small-balance retirement savings, and likens the new auto portability network to a "lost and found" -- providing a means for millions of participants to avoid the deleterious effects of cashing out.
Writing for Clark.com, Christopher Smith first takes the perspective of the participant, noting the difficult challenges they face in consolidating small-balance retirement savings and moving them forward as they frequently jobs. According to Smith, that dynamic produces high levels of cashout leakage, citing the $92.4 billion figure provided by EBRI. That perspective forms the basis for Smith's take that the new industry-led consortium announced 10/5/22 to accelerate the adoption of auto portability, will be a positive development. Smith observes that "instead of having your investments automatically cashed out — or put into cash in an IRA without you realizing it — your investments will follow you."
Ropes & Gray Represents Fidelity Investments In Creation of Portability Services Network, LLC, A Consortium Of Workplace Retirement Plan Recordkeepers
Ropes & Gray, a preeminent global law firm, with offices in America, Europe and Asia, announced the pivotal role that their firm played in representing Fidelity Investments "in its collaboration with Vanguard, Alight Solutions and Retirement Clearinghouse, LLC (RCH) to create a consortium of workplace retirement plan recordkeepers, Portability Services Network, LLC (PSN), which aims to accelerate the nationwide adoption of auto portability." Jeff Katz, co-head of Ropes & Gray’s global capital solutions and private credit practice, stated: “[t]he consortium will help mitigate cash-out leakage and preserve trillions of dollars in savings in the U.S. retirement system. Most importantly, it will protect workers’ retirement savings, particularly benefiting diverse communities, women, and low-income workers.”
Writing for Wealth Management, The Retirement Adviser University (TRAU) Founder & CEO Fred Barstein characterizes the recent announcement of an industry-led consortium to promote auto portability as "a major milestone for the defined contribution industry." In his piece, Barstein quotes RCH president & CEO Spencer Williams, who suggests that the new Network is "in discussion with three other top 10 DC providers" and is interested in examining other, long-term strategic opportunities for facilitating consolidation within the retirement industry.