TRANSCRIPT:

Tom Hawkins: Welcome to episode 25 of the RCH Consolidation Corner Channel, where we provide audio content that explores key issues in the preservation and consolidation of retirement savings. In this episode, we look at the critical need to build out a digital clearinghouse infrastructure for America’s retirement system. We hope you’ll find the audio enjoyable and informative.

NARRATOR: Today, we’re talking about an urgent evolution underway in America’s retirement system—one that could finally stop billions of dollars in savings from slipping through the cracks.

Recently, Retirement Clearinghouse released a major whitepaper titled “Building Out Clearinghouse Services for the U.S. Retirement System.” The message is simple. If our retirement system is ever going to function like a true system, it needs infrastructure – and that means building out clearinghouse services.

For decades, the U.S. retirement system has done a great job helping workers save. But it has consistently failed to help them keep those savings.

Three structural issues are at the heart of the leakage problem:

First, the system is deeply fragmented. Recordkeepers, custodians, IRA providers, and government programs all run on disconnected platforms. When workers change jobs—a routine life event—those systems can’t communicate. This creates friction, lost accounts, and, in the case of small balances or terminated plans, forced transfers into stranded safe‑harbor IRAs.

Second, our workforce is highly mobile. Each year, 15 to 20 million Americans switch jobs. Every move increases the risk of small, inactive accounts being separated, forgotten, or cashed out entirely.

And third, public policy has focused almost exclusively on getting people into the system—through auto‑enrollment, auto‑escalation, and expanded access. But we’ve never built the infrastructure needed to protect savings once they’re there.

Put simply: we’ve been filling the retirement bucket for years… while ignoring the hole at the bottom.

Our whitepaper outlines a solution whose time has finally come—a neutral clearinghouse that standardizes how retirement accounts are located, verified, moved, and reconnected as workers change jobs.

The good news? We’re not starting from scratch.

Auto portability—delivered today through the Portability Services Network—is already proving the model at scale. What used to be a slow, manual process is now fully automated through a common set of rules and secure, interoperable APIs.

More than 21,000 retirement plans and six major recordkeepers—serving over 60% of U.S. defined contribution participants—are already part of this network. And millions of workers now have access to automatic consolidation of small balances when they change jobs.

Auto portability has shown us the blueprint. Now it’s time to build the rest of the system.

But it’s the advent of the Saver’s Match program that makes a clearinghouse take on added urgency.Beginning in 2028, the federal government will launch the Saver’s Match—the largest retirement‑savings initiative in our nation’s history.

Unlike a simple tax credit, Saver’s Match dollars have to be routed into a qualified retirement account. That means millions of contributions, flowing from the U.S. Treasury into thousands of plans across a highly mobile population.

Without a clearinghouse, those dollars could end up lost, rejected, or stuck—just like millions of small‑balance accounts today.

Our whitepaper reveals a simulation we conducted, where we modeled how a dedicated Saver’s Match Network—built on the same technology that powers auto portability—could ensure that matched dollars found the right account, and stayed there.

Beyond the Saver’s Match, two additional networks are needed to fully modernize the system:

  • The Auto Locate Network, which uses network‑based queries to solve the persistent problem of missing participants by identifying the most accurate, up‑to‑date addresses.
  • The Digital Rollover Network, which expands the clearinghouse model to help reconnect workers with larger retirement balances and streamline rollovers at every job change.

Together, these networks form the comprehensive infrastructure our retirement system has been missing for 50 years.

Here’s the bottom line: a retirement clearinghouse is no longer optional. The infrastructure now exists. The proof points are real. And the timing—driven by the Saver’s Match—is critical.

If the industry acts now, we can finally build a retirement system that protects workers’ savings throughout their entire careers… instead of losing them along the way.

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