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Auto Portability - Recent Developments
Find the most-recent auto portability media coverage and developments.
On 12/12/18, President Donald J.
Trump signed an executive order establishing the White House Opportunity and
Revitalization Council, intended to facilitate long-term equity investments in
low-income communities designated as "qualified opportunity
zones." Among the distinguished guests at the event was entrepreneur
Robert L. Johnson, founder of the RLJ Companies and majority owner of
Retirement Clearinghouse. Mr. Johnson took the opportunity to
congratulate the administration and Sen. Tim Scott (R-SC) for their role in the
Department of Labor's recent Advisory Opinion on auto portability, noting that
auto portability will preserve $800 billion in minorities' retirement savings.
Video available on YouTube's White House channel here (queued to start at the President's introduction of Mr. Johnson)
Pensions & Investments' Washington reporter Brian Croce examines the RCH auto portability program, following the DOL's November guidance. Croce outlines key aspects of the RCH program, quoting noted Washington-based ERISA expert Michael P. Kreps, who states that a key outcome of the DOL's Advisory Opinion is to "provide plan sponsors with additional certainty that they're not taking on additional fiduciary responsibility or risk by selecting this product." Croce also quotes RCH CEO Spencer Williams, Boston College's Alicia Munnell and the American Benefits Council's Lynn Dudley.
In her 12/9/18 opinion piece in Barron's, noted retirement researcher Alicia H. Munnell takes stock of the recent DOL actions on the RCH Auto Portability program, which she characterizes as "good news" and a "win for the 401(k) system." Munnell credits RCH's Spencer Williams and Tom Johnson for the solution, which automatically consolidates small accounts as employees change jobs, addressing the 401(k) system's cashout leakage problem.
With the announcement of the Department of Labor’s recent actions, auto portability has taken center stage in the retirement industry. While auto portability has been well-known to a relatively small group of industry insiders, its recent, widespread coverage in the media has many asking the question “what is auto portability?” In his December 2018 article in BenefitsPRO, RCH Senior Vice President Tom Hawkins suggests that the best answer may depend on who's asking the question, but one thing's clear: auto portability is an idea whose time has come.
In her 12/4/18 article in MarketWatch, noted economist and retirement researcher Alicia H. Munnell applauds the Department of Labor's favorable actions toward the RCH auto portability program. Munnell highlights the dilemma facing millions of Americans each year, who leave their jobs and cash out their retirement savings, and cites the ongoing efforts by RCH's Spencer Williams and Tom Johnson in crafting the solution, auto portability. Munnell aptly characterizes auto portability's recent progress as being "so lovely to see a win for the 401(k) system."
Also featured in Morningstar News (link)
Forbes contributor Christian Weller, a professor of public policy at the University of Massachusetts Boston and a senior fellow at the Center for American Progress, links the trend of increased job-changing in a strong labor market to the challenges of moving retirement savings forward. Acknowledging the inherent difficulties in managing multiple accounts and the hazards of cashing out, Weller points to the RCH auto portability program as a highly-positive development, stating that "the approach appears successful in reducing leakage and increasing workers’ retirement account balances."
Arris Reddick Murphy, Contributing Editor to HR Daily Advisor, and senior counsel with FedEx Corp.’s Tax & Employee Benefits Law group, examines the potential impact of the Department of Labor's recent actions towards RCH's auto portability program. Murphy outlines the strategic benefits for plan sponsors who participate in the auto portability program, including a reduction in small accounts, missing participants and uncashed checks. Murphy also points out the importance of participation of both plan sponsors and service providers, stepping through various aspects of the program, while offering planning tips for participating plan sponsors.
ASPPA Net's John Iekel examines the recent column by J. Mark Iwry, former Senior Advisor to the Secretary of the Treasury, which addresses the recent actions by the DOL in support of the RCH auto portability program. Iwry, says Iekel, offers a unique perspective, having been a long-time proponent of retirement savings portability, and also having witnessed firsthand the difficulties in moving portability policy initiatives forward.