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401k consolidation blog posts
Plan Churn: The Hidden Threat to a Mobile Workforce’s Retirement Savings
Writing in Consolidation Corner, RCH’s Tom Hawkins examines the phenomenon of “plan churn” – which he defines as the ongoing incidence of plan terminations and changes in plan recordkeepers. When combined with a highly mobile workforce, plan churn can create a “perfect storm” that magnifies the risk of cashout leakage as well as the problem of left-behind accounts. Plan churn, asserts Hawkins, can be best addressed by automated account consolidation, as identified in Retirement Clearinghouse’s vision of a digital clearinghouse model for the defined contribution system.
The Recordkeeper Case for Auto Portability
Writing in the RCH Consolidation Corner Blog, Steve Holman, SVP of PSN Strategy & Development, lays out the case for auto portability from the perspective of defined contribution recordkeepers. Holman identifies four important reasons why auto portability is beneficial, including 1) delivering a positive ROI, 2) differentiating their value proposition, 3) industry collaboration & reciprocity and 4) strengthening the DC system by addressing the small account problem at scale. “Auto portability” concludes Holman, “is not simply an operational enhancement – it is a foundational capability for the future of defined contribution plans.”
The Participant Case for Auto Portability
In the first follow-on article to his earlier piece The Plan Sponsor Case for Auto Portability, Steve Holman, Senior Vice President, PSN Strategy & Development makes the participant case for auto portability. In this article, Holman explains auto portability’s beneficial impact on plan participants, which “helps participants avoid cashing out prematurely, keeps their savings invested, simplifies their financial life and builds a stronger retirement future.”
The “Free Lunch” That is Retirement Savings Portability
Writing in the RCH Consolidation Corner blog, Tom Hawkins asserts that "retirement savings portability helps everyone, hurts no one – and with no cost to plan sponsors to implement – it’s the equivalent of a 'free lunch' for the retirement savings ecosystem." Hawkins goes on to back up that claim by detailing the benefits of portability programs to key stakeholders, directing readers to empirical support for those benefits and identifying "five recent, broad-based developments that, taken together, make a compelling case that full retirement savings portability is close to becoming a reality."
The Plan Sponsor Case for Auto Portability
Writing in the RCH Consolidation Corner blog, Steve Holman, SVP of PSN Strategy and Development, makes a compelling case for plan sponsor adoption of auto portability, as delivered by the Portability Services Network. Holman identifies four key issues that auto portability addresses, including high workforce mobility, reducing plan leakage, lowering administrative burdens, and curbing growth in small, inactive accounts -- while citing seven solid reasons why the choice to adopt auto portability adoption is in plan sponsors' best interests.
Retirement Savings Portability – An Idea Whose Time Has (Finally) Come
Writing in RCH’s Consolidation Corner, Tom Hawkins takes stock of five recent, broad-based developments that, taken together, make a compelling case that full retirement savings portability is getting closer to becoming a reality. Key developments Hawkins describes include: 1) auto portability and the rise of the Portability Services Network, 2) key government retirement savings initiatives, 3) potential provisions of SECURE 3.0, 4) an increased focus on “forgotten” accounts and 5) expanding the portability of Roth balances.
Larger 401(k) Plans Embrace Auto Portability as Due Diligence Drives Confidence
Since late 2023, when auto portability – as delivered via the Portability Services Network (PSN) – became operational, the new plan feature has been steadily working its way from an innovative concept into a core best practice for addressing the chronic problem of retirement plan cashout leakage. What’s becoming increasingly clear is that larger 401(k) plans are now joining the movement in meaningful numbers. That shift represents an important inflection point: one where cautious, scale‑focused plan sponsors are completing their due diligence and becoming confident that auto portability delivers real, measurable value to participants without introducing unnecessary risk.
On Earth Day, Consider Auto Portability to ‘Recycle’ 401(k) Savings
On April 22nd, we celebrate the 56th annual Earth Day, and
that gives RCH’s Tom Hawkins the opportunity to consider how the concept of
recycling applies to our nation’s 401(k) system, which Hawkins characterizes as
having a “waste problem” that manifests in the form of excessive cashout
leakage and stranded accounts. By contrast, auto portability represents a
sustainable solution that ‘recycles’ small-balance accounts, and its adoption
is rapidly accelerating via members of the Portability
Services Network (PSN).
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