TRANSCRIPT:

Tom Hawkins: Welcome to another edition of the RCH Consolidation Corner Channel, where we provide you with audio content that explores key issues in the preservation and consolidation of retirement savings. In this episode, we examine new research, just released, which gives us a much better understanding of the Saver’s Match program. We hope you’ll find the audio enjoyable and informative.

NARRATOR: Recent research findings, released in August 2025, offer further insights into the Saver's Match program, which is slated to commence in 2028, for the 2027 tax year.

Two distinct research efforts, one by Morningstar Retirement and another by Retirement Clearinghouse, quantify the comprehensive benefits of the Saver's Match program and model its potential scope, scale, and operational requirements. The findings clearly indicate that the Saver's Match program is poised to significantly boost retirement savings, particularly for population segments that have traditionally been underserved. The program is projected to be vast in scale, potentially impacting over 27 million eligible savers annually. The program's massive scale will necessitate the efficient and effective routing of Treasury-funded matching contributions to valid and qualified accounts.

With respect to the Saver's Match benefits, Morningstar Retirement estimates that the Saver's Match program could generate an incremental $2.03 trillion in retirement wealth. This substantial figure was derived by Jack VanDerhei and Spencer Look, utilizing the Morningstar Model of U.S. Retirement Outcomes. Their calculations assume that the program will positively influence behavior, encouraging current savers to increase contributions and incentivizing new savers to participate. This aligns with a July 2024 survey indicating the program's strong potential to influence both savers and non-savers.

Morningstar's analysis also reinforces earlier research indicating that specific demographic groups, including single women, Black Americans, and Hispanic Americans, stand to gain considerable benefits from the program.

Taking a different approach, a team assembled by Retirement Clearinghouse, led by Ricki Ingalls, developed a Saver's Match Simulation. This discrete event simulation models the program's complete operational lifecycle over a 10-year period, specifically incorporating the technologies and solutions required for its support. The simulation utilized authoritative data sources, including the IRS, Department of Labor, and EBRI, applying a "best available data" standard. Notably, EBRI's estimates of eligible savers were updated to account for significant growth in defined contribution plan participants since 2018, as well as the expansion of state-based Auto IRA programs. The revised estimates project an increase from 21.9 million eligible savers (based on 2018 IRS data) to 27.1 million for the 2027 tax year, with a substantial 87% of these eligible savers contributing to employer-sponsored plans. The model also projects an average matching contribution of $634 per eligible saver, including amounts less than $100 that can be claimed as a refundable tax credit.

Crucially, the simulation model integrates components of established auto portability technology to locate, match, and transfer matching contributions to qualified plan accounts. The matching algorithm first attempts to identify a saver's designated account and, if unsuccessful, conducts broader searches to locate a current, active qualified account. Upon successful location and matching, automated data and fund transfers are executed.

The Saver's Match Simulation yielded three critical takeaways:

  • First, achieving high claiming rates for matching contributions is paramount for the program's success. This can be influenced by effective promotional efforts and user-friendly claiming processes, both of which will be controlled by the program.
  • Second, rapid program adoption by providers and plan sponsors is crucial for efficient processing and throughput. While initial contributions may be housed in a transitional IRA, the modeled solution aims for prompt transfer of all matching contributions to the defined contribution system or existing traditional IRAs.
  • Third, the deployment of proven financial technology to automate the location, matching, and movement of funds is essential for the efficient operation of the Saver's Match program.

The combination of the Saver's Match program's significant potential impact, its vast scope and scale, and a relatively short implementation timeframe presents considerable challenges. It will necessitate the deployment of a robust operational model that incorporates proven financial technology in the lead-up to the program's launch.

Ensuring the complete success of the Saver's Match program is critical, given its substantial potential for enhancing retirement security.

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