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Auto enrollment blog posts
New Penalties for Lost Participants Take Effect
In November of 2015, Congress enacted the Federal Civil Monetary Penalties Inflation Adjustment Act Improvements Act to apply inflation adjustments to various penalties defined under the Federal Civil Inflation Adjustment Act of 1990.
Auto Enrollment: The Unintended Consequences, Part II (Research)
In his December 1, 2015 article (The unintended consequence of 401(k) auto-enrollment), RCH CEO Spencer Williams exposes the linkage between auto enrollment and lower average account balances. Based on Form 5500 data, Williams' analysis presents some excellent examples of industries where average balances are significantly lower in plans that have adopted auto enrollment compared to plans that have not. RCH's Tom Hawkins follows up that article with his own analysis, extending Williams' earlier work.
As 401(k) Cash Out Leakage Grows, So Does Need for Auto Portability
In his December 11th article in BenefitsPro (Addressing the Critical Problem of 401(k) Cash Outs), Nick Thornton draws much-needed attention to the magnitude of the 401(k) cash out leakage issue, due to the frictions associated with account portability when plan participants switch jobs. Thornton's article rightly emphasizes the need for automated portability similar to automatic enrollment and deferral increases - to effectively address the cash out problem.
The unintended consequence of 401(k) auto-enrollment
Auto enrollment, codified in law by the Pension Protection Act of 2006, was drafted with the best of intentions to increase Americans' retirement savings but it has had the unintended consequence of impairing plan effectiveness. By proliferating small accounts in plans, auto enrollment has caused a decrease in average account balances throughout the U.S. retirement system. Adding to the urgency of this issue is the rising rate of auto enrollment adoption across defined contribution plans of all sizes, but particularly among larger plans.
What Participants' Distribution Decisions Are Telling Us
That's changing, as Neal Ringquist explains.
Enhance Auto Enrollment with Auto Portability
The Pension Protection Act of 2006 created a safe harbor for retirement plan sponsors to automatically enroll employees in their plans. This provision was designed to help plan sponsors and participants over the long term, and it has but it also unintentionally fueled a surge in small accounts, hurting both constituencies. Auto Portability is a solution that promises to address the problems associated with automatic enrollment. The benefits are huge -- particularly for high-turnover industries.
5 Retirement Plan Resolutions For 2015
New Year's resolutions are not just for dieters and exercisers. The start of a new year is an ideal time for retirement plan sponsor to assess the effectiveness of their plan. Virtually all plan sponsors have areas that are ripe for improvement. Here are five resolutions to make and keep in 2015 to ensure you have a smoothly-running, cost-effective plan than succeeds at preparing employees for retirement.
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