Menu

401k consolidation blog posts

Jun
16
2023

The 401(k) “House-Cleaning” to Come

The increase in the automatic rollover threshold from $5,000 to $7,000, as provided for in section 304 of the SECURE 2.0 legislation, will become effective for mandatory distributions made after December 31, 2023. What will be the impact of these provisions, if fully embraced by plan sponsors? One thing is certain – on both a one-time and ongoing basis, far more terminated participants will be subject to the automatic rollover provisions of their former-employers’ plans. Writing in the RCH Consolidation Corner blog, Tom Hawkins explores the impact of an increased threshold that, when paired with the advent of auto portability and the operational status of the Portability Services Network (PSN), could mean that small balance terminated participants will finally come out on top.

Read More
May
11
2023

As Time Passes, The Gains Become Harder

RCH's Tom Hawkins, writing in the Consolidation Corner blog, observes that our nearly 45 year-old defined contribution system may face diminishing returns as it tries to generate future growth, and should focus on quality and efficiency as it simultaneously expands access. Using fitness as an analogy, Hawkins offers a "workout plan" for the DC system, including plugging leakage through increased portability and emergency savings, while fostering increased retirement savings consolidation to avoid an explosion in small accounts. When combined with expanded access initiatives, these measures can dramatically increase Americans' retirement security, over and above expanding access alone.

Read More
Apr
28
2023

Highway Through the 'Danger Zone'

Writing in the Consolidation Corner blog, RCH's Tom Hawkins notes that the issue of 401(k) cashout leakage is "once again in the news, with the publication of an alarming study by academics, as well as new data from Fidelity Investments." Hawkins goes on to cite "compelling real-world data that supports the efficacy of retirement savings portability in dramatically reducing unnecessary cashout leakage" -- representing "a much-needed highway through the ‘danger zone’ of unnecessary cashout leakage, increasing retirement security for millions of job-changing 401(k) participants."

Read More
Apr
01
2023

Financial Literacy Can Help Close the Minority Wealth Gap for Retirement Savings

In observance of Financial Literacy Month, RCH and PSN President & CEO Spencer Williams offers his perspective on how “members of the retirement services industry have an opportunity to pause and think about how they can help empower more people to achieve a financially secure retirement.” Williams notes that plan sponsors and recordkeepers have a vital role in preventing premature 401(k) cashouts via education about their detrimental effects and through the adoption of auto portability “which can enable them to transport and consolidate their accounts instead.”

Read More
Jan
13
2023

The Big Shift Towards Auto Portability

RCH's Tom Hawkins, writing in the Consolidation Corner blog, asks readers if they've noticed the recent "big shift" towards auto portability. Hawkins writes: "[f]or those accustomed to a glacial pace of change in the world of retirement, you could be forgiven if you’ve missed two very recent, tectonic shifts toward the system-wide adoption of auto portability" occurring in rapid succession in the fourth quarter of 2022. The formation of the Portability Services Network (PSN) in October, quickly followed by SECURE 2.0 legislation that included important auto portability provisions, were both "unprecedented actions" which will continue to reverberate in the retirement industry. "The 'big shift'", Hawkins concludes, "won't be completed overnight, but it's already well underway, and will proceed with a pace that could take many more by surprise."

Read More
Dec
20
2022

2022: A Most Consequential Year for Retirement Savings Portability

Last year at this time, Retirement Clearinghouse (RCH) predicted that 2022 would be a pivotal year for retirement savings portability. It turns out we were right, but we confess to being pleasantly surprised at just how consequential (and positive) the year has been, and it’s not over yet. Writing in the Consolidation Corner blog, RCH's Tom Hawkins provides a rundown of key events during 2022 that have helped to positively shape the future of retirement savings portability.

Read More
Dec
13
2022

Webinar Showcases Extraordinary Industry Alignment on Auto Portability

For defined contribution recordkeepers, competition has long been fierce, so it’s extraordinary when industry rivals join forces and align around a common cause. That alignment around auto portability, embodied in the newly launched Portability Services Network (PSN), was on full display in a 12/8/22 Groom Law Group webinar. The event featured representatives from retirement industry titans and founding PSN members Alight Solutions, Fidelity Investments and the Vanguard Group, joined by Retirement Clearinghouse (RCH).

Read More
Nov
01
2022

A New Year’s Resolution for Sponsors: Facilitate Automated Plan-to-Plan Portability for Your Participants

Writing in RCH's Consolidation Corner blog, and taking his cue from the 10/5/22 announcement of the industry-led utility (Portability Services Network) to accelerate the nationwide adoption of auto portability, RCH President & CEO Spencer Williams encourages plan sponsors resolve to adopt auto portability in the New Year, for both their participants and for the health of their plans. Williams writes: "[a]s we look ahead to the New Year, plan sponsors can resolve to help their participants increase their retirement savings—and increase key metrics such as average account balance—by adopting auto portability."

Read More
Page: