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401k consolidation blog posts
RCH's Tom Hawkins summarizes the April 10th EBRI webinar Trends in Employee Tenure, which offered EBRI’s latest research examining broad employee tenure trends, and the impact that shorter tenure has on retirement savings. The webinar’s presenters included Craig Copeland, EBRI and Spencer Williams, Retirement Clearinghouse (RCH), and was moderated by Stacy Schaus, Schaus Group LLC. In his portion of the presentation, Williams introduced the concept of “synthetic tenure” – whereby enhancing system-wide portability -- particularly for small accounts -- enables participants to preserve their savings through job changes, mirroring the success of EBRI’s longer-tenured, “consistent participation” population.
How Auto Portability Serves Participants’ Best Interests - Part 3: Auto Portability Could Lower Plan Expenses
In the 3rd installment of his five-part series on "How Auto Portability Serves Participants' Best Interests", RCH's Tom Hawkins examines how a program of auto portability can serve to lower plan expenses by 1) reducing small-balance accounts and 2) increasing plan assets. To illustrate these benefits, Hawkins uses the Auto Portability Simulation (APS) to model a hypothetical, 10,000 participant plan over 40 years, with and without auto portability.
How Auto Portability Serves Participants’ Best Interests - Part 2: An Enhanced Standard of Participant Care
In the second installment of his five-part series "How Auto Portability Serves Participants' Best Interests", RCH's Tom Hawkins examines how auto portability, by extending and enhancing elements of automatic rollovers, establishes a new standard of participant care. Auto portability, writes Hawkins, protects participants by: 1) minimizing time spent in a safe harbor IRA, 2) eliminating the need to cash out balances less than $1,000, 3) enhancing participant communication, 4) formally integrating a robust address location search and 5) establishing a transparent, simple & straightforward fee structure.
How Auto Portability Serves Participants’ Best Interests - Part 1: Dramatically Improved Participant Outcomes
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.
In his latest article in Consolidation Corner, 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.
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 this article, 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.