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Mobile workforce (or job-changing participants) blog posts
PBGC Report Points to a Retirement System Solution that Already Exists
Writing in the Consolidation Corner blog, RCH’s Tom Hawkins draws attention to the Pension Benefit Guaranty Corporation (PBGC)'s recent report to Congress (Feasibility of Expanding PBGC’s Missing Participants Program) which found that converting PBGC's existing program into a national consolidator of small retirement balances would require substantial new systems, resources, and expertise. Importantly, the PBGC report recognizes that private-sector solutions have already emerged to address the problem, indirectly referring to RCH, PSN and auto portability. Consistent with the PBGC’s report, Hawkins concludes: “public policy can support, encourage, and accelerate the development of a comprehensive clearinghouse network that keeps workers connected to their savings throughout their careers.”
The Plumbing Our Country’s Retirement System Needs
Writing in the RCH Consolidation Corner blog, RCH President & CEO Spencer Williams argues that the U.S. retirement system suffers from costly “leaks” because workers frequently change jobs and cash out small retirement balances rather than keep their savings invested. Using a plumbing analogy, Williams explains that the industry has evolved from basic “one-to-one” transfers to more sophisticated “one-to-many” platforms, but to truly preserve retirement savings it needs a “many-to-many” clearinghouse that allows assets to move seamlessly among plans through shared technology and reciprocal connections. Williams contends that this infrastructure is increasingly important as retirement savings vehicles become more diverse and as public policy initiatives such as the Saver’s Match are implemented. He points to Auto Portability, enabled by the Portability Services Network (PSN), as proof that a true clearinghouse model can operate successfully at scale, helping keep savings in the retirement system, reduce account fragmentation, and improve long-term retirement outcomes.
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.”
America250: How the Retirement Services Industry can Make Good on the Promise in the Declaration of Independence
Linking America's 250th birthday celebration, the American Dream and achieving a financially secure retirement, RCH and PSN CEO Spencer Williams emphasizes the importance of protecting small-balance retirement savings when workers change jobs. As Williams observes: "making money is only half the battle to a secure retirement – saving money is the other half" -- and appeals to the retirement industry to "renew our commitment to helping Americans preserve their retirement savings, in order to increase the income they can enjoy after retiring."
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.
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