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Auto Portability - Recent Developments
Find the most-recent auto portability media coverage and developments.
An Important Milestone: The DOL Issues Final Prohibited Transaction Exemption 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
401k Cashout Confusion: Who’s Doing It and Why?
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.
Preparing Employees for Retirement, a Global Comparison
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."
What’s missing from the SECURE Act? A provision to plug cash-out leakage
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.
5 Positive Retirement Plan Proposals Currently Circling Washington
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."
P&I: EBRI Study Examines Legislative Proposals, Highlights Benefits of Auto Portability
Pensions & Investments' Hazel Bradford reports on the latest EBRI research to examine legislative proposals, including auto-IRAs, that would expand retirement plan coverage. The EBRI study, notes Bradford, finds that "along with mandating that employers with more than 10 workers provide access to auto IRAs and raising the IRS' auto-escalation cap to 15% from the current 10%, EBRI calculated that auto-portability of all defined contribution assets through a clearinghouse would reduce the retirement deficit by 27.1%." Bradford further quotes EBRI Director of Research Jack VanDerhei, who adds: "[w]ith that combination, we can take care of a quarter of the retirement deficit alone for that age cohort."
Legislative Proposals Could Help Retirement Income Adequacy: EBRI
In her 7/12/19 article, PLANSPONSOR's Rebecca Moore reports on the latest EBRI research to address legislative proposals that expand access to employer-sponsored retirement plans. Once again, the EBRI findings reveal the highly-beneficial, additive impact of auto portability, when considered in tandem with other policy initiatives. The EBRI analysis, which examined various scenarios involving the widespread adoption of auto-IRA programs, found that adding auto portability to the mix resulted in the youngest cohort (35-39) realizing a reduction in their retirement savings shortfall (RSS) of 27.1% under auto portability, vs. 17.3% without the auto portability feature.
Also featured in PlanAdviser.
Why 401k Cashout Leakage is a Crisis
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 first article, Hawkins addresses the fundamentals of cashout leakage -- defining it, clearing up common sources of confusion, and identifying why the problem continues to persist.