By Tom Hawkins | August 28th, 2025

When American workers change jobs, the fate of their retirement savings is often left hanging in the balance – especially for those with smaller accounts of less than $7,000. Historically, this segment of retirement participants has faced an uphill battle, where complex transfer processes and the lure of “sudden money” have frequently produced cashouts that undermined their long-term retirement security.

But today, with the continuing adoption of auto portability via the Portability Services Network, the story is changing.

Auto portability directly addresses the most pressing needs of these small-balance participants: reducing cashout leakage, automating consolidation, and making the preservation of retirement savings the default, “easiest choice.” Beyond meeting these needs, auto portability also aligns beautifully with what participants want, as revealed in multiple, authoritative surveys showing strong consumer demand for automated retirement account solutions.

Addressing Participants’ Needs
While the concept of a “need” typically refers to something that is required for one’s physical survival, this term is properly applied here, as it applies to the survivability of participants’ savings until they reach retirement age – and cashouts represent an existential threat to the accumulation of retirement wealth.

Reducing Cashout Leakage with a Default Consolidation Mechanism
When workers leave a job with small balances in their workplace plan, cashing out is typically the path of least resistance—an unfortunate default that undermines retirement readiness.

This is not a minor issue. Research consistently shows that small-balance participants are by far the most vulnerable to leakage. Faced with a job change, confusing paperwork, or the perceived hassle of rollovers, too many workers opt to liquidate their savings.

But when we study what happens when participants are actively supported during this “transition moment,” the story changes dramatically. Retirement Clearinghouse’s own longitudinal, empirical research with a large mega plan sponsor demonstrated that when portability assistance and education were provided, cashout leakage rates dropped by more than 50%, across all balance segments.

The lesson is clear: when the system proactively enables consolidation, rather than leaving participants on their own, much of the harmful leakage disappears. Auto portability takes this proven principle a step further, by embedding consolidation as the default process. Instead of relying on participants to act, auto portability ensures that when a worker with a small balance changes jobs, their savings can automatically follow them into their new employer’s plan, effectively reducing the temptation to cash out.

This shift from a “do-it-yourself” system to a “default-based” system is transformative. By creating a standard, easy route for balances that are otherwise most at risk, auto portability has the power to change long-term outcomes for millions of workers.

Making Consolidation the “Easiest Choice”
Behavioral finance teaches us that inertia is one of the most powerful forces in personal financial decision-making. When faced with too many choices, or with processes perceived as difficult – participants tend to either delay action indefinitely or default to the path of least resistance.

Sadly, today’s defined contribution system makes cashing out the easiest choice. A participant leaving their job may be presented with a simple form or click-to-confirm option to liquidate their savings and receive a check. By contrast, consolidating into a new employer plan typically requires tracking down account details, mailing forms, or navigating complex rollover instructions.

Auto portability fundamentally rewrites this script. By establishing a seamless, automated transfer process between plans, the system now makes preservation the easiest option. Small-balance savers who might otherwise suffer the high cost of cashing out, now benefit from a system that nudges them toward consolidation and long-term success.

This behavioral intervention cannot be overstated. For groups long marginalized by cash-out trends – particularly younger, minority, and lower-income savers – auto portability offers a practical path forward.

Meeting Participants’ Wants
While meeting participants’ needs is critical, any solution is made stronger when it also reflects what participants actually say they want.

Encouragingly, the evidence here is overwhelming: auto portability doesn’t just meet an academic or policy-driven need – it delivers solidly on participant preferences.

Desire for Automated Solutions
In March 2018, Boston Research Technologies undertook the landmark study, The Mobile Workforce’s Missing Participant Problem, surveying 1,000 consumers who had participated in at least one workplace retirement plan. Among the many insights, one stood out: 60% of respondents wanted an automated process to update their address or to consolidate accounts.

This finding was an early signal that participants—faced with increasingly mobile careers and fragmented savings—were eager for a frictionless, automated way to keep their retirement savings together. Far from resisting automation, they welcomed it.

Recognition of Auto Portability’s Value
Fast-forward to April 2021, when the Employee Benefit Research Institute (EBRI) published its 31st Annual Retirement Confidence Survey (RCS). Within the survey, nearly 9 in 10 respondents said that auto portability would be valuable to them.

This is an extraordinary finding. Few retirement innovations receive such near-universal endorsement from participants themselves. The message could not be clearer: workers don’t just passively accept the idea of auto portability – they actively affirm its importance.

A Plurality for Portability
One year later, in April 2022, EBRI’s RCS again illuminated participant sentiment – this time drilling down into options for consolidating savings during job changes. The survey revealed that a plurality of job-changing 401(k) participants explicitly favored automatic plan-to-plan portability over leaving their funds behind, rolling them into an IRA, or managing consolidation themselves.

This data point is also crucial. Not only do participants recognize auto portability’s advantages, but when given a menu of choices, they prefer it above other alternatives.

A Powerful Case for Auto Portability
When evaluating new features for the retirement system, it’s rare to find innovations that so neatly align participant needs and wants. But auto portability checks both boxes.

  • By addressing the needs of small-balance participants, auto portability stands as a proven solution to reduce widespread cashout leakage, while using behavioral design to make consolidation the easy, natural choice.
  • By aligning with participant wants, as demonstrated by multiple independent surveys, auto portability ensures broad consumer support – a vital ingredient in driving adoption and success at scale.

Together, these two dimensions create a powerful case for why auto portability is being rapidly adopted. The outcome will be a healthier retirement system that gives every worker – regardless of balance size – a fighting chance at long-term retirement security.

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