Auto Portability - Recent Developments

Find the most-recent auto portability media coverage and developments.


Feb
11
2019

EBRI Reassesses Whether DC or DB Plans Are Better for Participants

PLANSPONSOR's John Manganaro examines EBRI Research Brief #473, released 2/7/19, which compares the outcomes of participants in automatic enrollment 401(k) plans versus defined benefit (DB) plans. Manganaro quotes the study as finding that DB break-even accrual rates required for equivalency to their 401(k) counterparts are "rarely less than 1.5% of final pay." Under a scenario where auto portability is combined with 401(k) plans, the DB break-even accrual rates increase further to deliver equivalency, with auto portability's impact "greatest among the lowest income quartile."

Feb
11
2019

RCH's Spencer Williams on Auto Portability's Benefits to Minorities

In his latest article in Employee Benefit News, RCH President & CEO Spencer Williams addresses the headwinds facing minorities in saving more for their retirement, including significantly higher rates of job turnover and cash-out leakage. Building on statements by RCH Chairman Robert L. Johnson at a December 2018 White House event, Williams makes the case that – for minority savers – auto portability could preserve up to $1.4 trillion in retirement savings, over a generation. Williams concludes that auto portability represents the “best, and easiest, way for sponsors and their service providers” to address the problem.

Feb
07
2019

PLANSPONSOR: Groom's Saxon Welcomes DOL's Auto Portability Guidance

In the January 2019 edition of PLANSPONSOR magazine, Groom Law Group's Stephen Saxon welcomes the U.S. Department of Labor's (DOL) November 2018 guidance on the RCH auto portability program. The DOL, says Saxon, "clarifies important questions about the fiduciary implications for plan sponsors" and provides "much welcome comfort" to plan fiduciaries considering the program. Saxon concludes his analysis by stating that "auto-portability will have a positive, long-term impact on the U.S. retirement system by reducing leakage and enabling American workers to consolidate their small retirement balances on an efficient basis."

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Jan
31
2019

Kiplinger: How to Avoid Cashing Out Your 401(k)

Kiplinger's Brendan Pedersen examines the favorable impact that the U.S. Labor Department's ruling on auto portability could have on 401(k) cashout leakage. At a macro level, Pedersen cites figures from Deloitte Consulting, which show that cashouts by workers with less than $5,000 saved could cost Americans $2 trillion over the next decade. At the individual level, Pedersen uses an illustration provided by Mike Giefer, CFP, who states “if they don’t retire for 40 years, that money invested could have been worth $75,000.”

Jan
24
2019

NAPA Net Cites EBRI Research on Women, Auto Portability

In his 1/24/19 NAPA Net article "EBRI: Single Women Face Significant Retirement Savings Shortfall", reporter Ted Godbout joins other media outlets in analyzing new EBRI research that projects a significant retirement savings shortfall for Generation X's women -- particularly single women and widows. Godbout also draws attention to EBRI's finding that auto portability, when applied to the problem, will result in "at least a double-digit percent reduction in the shortfall for all groups."

Jan
23
2019

PLANSPONSOR: EBRI Links Women's Retirement Security, Auto Portability

PLANSPONSOR's Rebecca Moore examines new EBRI research that demonstrates the "large impact" that auto portability can have on reducing Gen Xer women's retirement savings shortfalls. When EBRI adds auto portability to their projection model, Moore reports that the average shortfall for those with 21 to 30 years of future DC eligibility is reduced by 21% for single females to as much as 38% for widowers.

Jan
23
2019

Sidecar accounts can help plug 401(k) leakage to an extent

In his latest article in Employee Benefit News, RCH President & CEO Spencer Williams examines the impact of "sidecar" accounts, which he views as a positive trend and a feature that could serve as a useful tool in the struggle to curtail leakage of savings from defined contribution plans. Williams also contends auto portability will be essential to plugging the biggest hole in the retirement system’s "bucket" -- cashout leakage -- which represents 89% of the overall leakage problem.

Jan
18
2019

ThinkAdvisor: Women's Retirement Income Shortfall Improved by Auto Portability

ThinkAdvisor's Michael S. Fischer takes a deep dive into EBRI research that examines the gender disparity in retirement savings deficits projected for single women and widows. Fischer also highlights the EBRI finding that, for employees with 21 to 30 years of future DC plan eligibility, auto portability reduced the average retirement savings shortfall by 21% for single women and by as much as 38% for widowers.

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