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Auto Portability blog posts
Kennedy Townsend: Solving Portability and Cashout Leakage are a Key DOL Priority
On 12/6/21, Kathleen Kennedy Townsend, Special Assistant to the Secretary of Labor for Retirement, served as the keynote speaker at EBRI's 90th Public Policy Forum, and outlined the big-picture, retirement-focused priorities of the DOL. One of the DOL's three priorities is the issue of portability and leakage. RCH's Tom Hawkins examines Townsend's remarks to her EBRI audience, which revealed that she has a clear grasp of the magnitude of the cashout leakage problem, as well as its most-promising solution – enabling plan-to-plan portability.
Three New Year’s Resolutions for 401(k) Plan Sponsors
As 2021 comes to a close, RCH EVP Neal Ringquist offers 401(k) plan sponsors his suggestions for three 2022 resolutions that, if acted on, could deliver significant benefits for their plans, for their participants and ultimately for the entire 401(k) ecosystem. Ringquist bases his suggestions on several pivotal events that occurred in 2021, underscoring the need to deploy true plan-to-plan portability to solve the problem of cashout leakage.
A Brief History of Auto Portability
Auto portability is a new “automatic” plan feature rapidly gaining acceptance by large defined contribution recordkeepers. While the feature is relatively new, it’s tempting to view auto portability as an “overnight success.” In fact, auto portability has been a long time in the making. In his latest Consolidation Corner article, as well as in an embedded video, RCH's Tom Hawkins examines a “brief history” of auto portability.
Assessing the State of DC Plans & Retirement Savings, 15 Years After the Pension Protection Act
Marking the 15th anniversary of the Pension Protection Act (PPA), RCH President & CEO Spencer Williams offers readers his views on the unintended consequences of that legislation that “continue to reverberate” for both plan participants and sponsors. Acknowledging that the automatic enrollment feature has been successful in promoting increased plan participation, Williams notes that the feature has also resulted in a “sharp uptick in small, stranded 401(k) savings accounts” that – absent easy plan-to-plan asset portability – has led to increased participant fees as well as higher levels of cash outs. In response, Williams observes that “the private and public sectors have worked together to create solutions” such as auto portability, which can help rectify the PPA’s flaws, and allow Americans to save more for retirement.
Four Reasons Why Auto Portability Can't Wait
Writing in RCH's Consolidation Corner blog, Tom Hawkins makes the case that auto portability can wait no longer and cites four key reasons that the new "automatic" feature should be adopted. Hawkins' key reasons include: 1) cashout leakage isn't waiting, 2) the "Great Resignation" is accelerating, 3) policy initiatives that expand access to workplace retirement plans require auto portability to realize their intended benefits, and 4) auto portability is here, now and working.
Solving Cashout Leakage, Auto Portability Featured in Senate Committee Hearing
RCH Executive Vice President of Public Policy Renee Wilder Guerin examines the 10/28/21 hearing held by the Senate Special Committee on Aging -- A Financially Secure Future: Building a Stronger Retirement System for All Americans -- and found it to be highly-focused on the problems of cashout leakage, as well as its most promising solution, auto portability. Re-capping key testimony and Q&A from the hearing (including excerpted video), Wilder Guerin concludes that lawmakers are more focused than ever on solving retirement savings problems for under-served and under-saved demographic segments.
The Top Five Misconceptions About Auto Portability
Auto portability is a new “automatic” plan feature that is rapidly gaining acceptance by large defined contribution recordkeepers serving almost 10 million participants. While the feature is relatively new, it has received a great deal of attention in the media and has also been the beneficiary of definitive regulatory guidance, promulgated by the Department of Labor (DOL). Despite this, significant misconceptions persist about auto portability. The top five misconceptions are presented here, which includes a link to a short video.
Vanguard Joins the Auto Portability Clearinghouse
Writing in RCH's Consolidation Corner blog, Executive Vice President Neal Ringquist addresses the 9/21/21 press release by Vanguard that it will engage with RCH to introduce the RCH Auto Portability program to their defined contribution plan sponsor clients in mid-2022. Ringquist supplies readers with important perspective, stating: "Vanguard’s announcement is a major milestone in RCH’s ongoing efforts to deliver seamless, plan-to-plan portability to America’s defined contribution system. RCH Auto Portability has now been embraced by two of America’s top ten defined contribution recordkeepers, collectively serving almost 10 million employees."
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