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401k missing participants blog posts
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.
Beware of Second Order Effects for Retirement Savings Public Policies
RCH's Tom Hawkins examines “second order effects” that can occur with retirement savings public policies currently that would dramatically expand access to, and participation in, defined contribution plans. While the benefits are impressive, additional undesired consequences can arise that are antithetical to the policies’ original intent, including increased cashout leakage, missing participants, uncashed checks and forgotten/stranded accounts. Understanding these highly predictable second order effects, Hawkins identifies plan-to-plan portability as a means of addressing them, while significantly boosting the overall policies’ benefits.
Senate Hearing Reveals Large Employer Support for Auto Portability
RCH’s newly-appointed EVP of Public Policy, Renée Wilder Guerin finds a lot to like in the 7/28/21 Senate Finance Committee hearing, where lawmakers heard testimony on how to increase retirement savings, including tackling the longstanding problems of cashout leakage, missing participants and “forgotten” retirement savings accounts. Wilder Guerin notes that auto portability was favorably mentioned twice by Aliya Robinson (SVP, Retirement & Compensation Policy for ERIC), as a policy initiative her organization – comprised of the nation’s largest plan sponsors – supports. Coming on the heels of EBRI’s 21st Annual Retirement Confidence Survey, where nearly 9 in 10 participants indicated their preference for the feature, Senate Finance Committee testimony “bodes extremely well for auto portability’s widespread adoption, as well as the enactment of public policies that further enhance it.”
What’s Missing from Many Plans? Current Addresses for Participants
Writing in RCH's Consolidation Corner blog, RCH President & CEO cautions plan sponsors to be wary of an increased incidence of missing participants arising from COVID-19 related migration patterns. To make the case, Williams links 2020 migration data with recent address location research conducted by RCH. Taken together, these data points suggest that sponsors could soon be faced with a higher-than-expected incidence of "hidden" stale addresses. In response, Williams suggests that sponsors consider a program of "robust missing participant search techniques" including the use of more-reliable, "optimized" electronic searches.
Missing Participants: Five Important Considerations for Plan Sponsors
Writing in RCH's Consolidation Corner, Tom Hawkins offers retirement plan sponsors five important considerations that can help focus their efforts in designing, implementing and administering an effective program of locating missing participants. By staying focused on some key principles, including the adoption of sound search practices and retirement savings portability, plan sponsors can successfully navigate their near-term missing participant problems, while positioning their plan for far fewer problems in the future.
New Research on Locating Missing Participants Augments DOL Guidance
On 1/26/21, Retirement Clearinghouse (RCH) released a study that advances the art and science of locating missing 401(k) plan participants. The study – Improving the Effectiveness of Electronic Missing Participant Searches – comes on the heels of U.S. Department of Labor (DOL) guidance on the topic and is highly-useful for plan sponsors who utilize electronic searches, or “e-Searches” -- as they are referenced in the study.
How Sponsors can Facilitate Better Participant Outcomes and Improve Plan Metrics in 2021
Writing in the Consolidation Corner blog, RCH President & CEO Spencer Williams offers 401(k) plan sponsors two New Year's resolutions that could improve participant outcomes and boost plan metrics. Specifically, Williams suggests that plan sponsors 1) implement a robust missing participant search program and 2) eliminate the practice of automatic cash-outs. Fortunately, adds Williams, both of these resolutions can be achieved when plan sponsors embrace an auto portability program.
Three New Year's Resolutions for Plan Sponsors to Consider
Writing in Consolidation Corner, RCH EVP Neal Ringquist offers retirement plan sponsors three New Year's resolutions that, if adopted, will facilitate retirement savings portability and make 2021 a better year for the plan as well as for its participants.
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