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New Research Shines Light on the Saver’s Match Program
Writing in the RCH Consolidation Corner blog, Tom Hawkins puts two recent Saver’s Match research findings – one from Morningstar and the other from RCH – into perspective. The Morningstar research, authored by industry veteran Jack VanDerhei and Spencer Look, pegs the potential incremental retirement wealth generated by the Saver’s Match at $2.03 trillion. Another research effort, conducted by Retirement Clearinghouse, involves a discrete event simulation model of the Saver’s Match program, simulating specific technologies and operational solutions required to support the program. Together, writes Hawkins, “these two new research efforts…quantify overall Saver’s Match program benefits, and model the potential size, scale and operations of the program.”
In Light of Evolving Regulations, What are Plans Sponsors’ Fiduciary Obligations with Regard to Account Consolidation?
In his latest opinion piece, RCH Founder, President & CEO Spencer Williams discusses the fiduciary obligations of auto portability, "the process powering 401(k) account consolidation" and seeks to assuage lingering fiduciary concerns associated with "proposed regulations....issued on January 29, 2024 by the U.S. Department of Labor (DOL)." Williams contends that the DOL's regulations do not override fiduciary responsibilities as set forth in the DOL's 2018 Advisory Opinion, or contained in "the regulatory framework for automated portability transactions already in the SECURE Act 2.0."
The Huge Potential of the Saver’s Match for Closing the Retirement Savings Gap
There’s a lot of attention focused on the Saver’s Match, the SECURE Act 2.0-enabled program that – starting in the 2027 tax year – will allow qualified individuals who contribute to an IRA or participate in an employer-sponsored retirement plan to receive a 50% federal matching contribution of up to $1,000. In his latest article in the RCH Consolidation Corner blog, RCH President & CEO Spencer Williams breaks down the highly positive impact that the program will have on retirement security, citing research revealing that “the Saver’s Match has the potential to accomplish more than many expected as far as closing the retirement savings gap among Americans.”
The Saver's Match and Auto Portability: A Powerful Combination
Two groundbreaking retirement savings initiatives could be poised to converge, potentially revolutionizing the way Americans save for retirement. The Saver's Match program, set to debut with the 2027 tax year, and auto portability, powered by the Portability Services Network (PSN), present a unique opportunity to address long-standing challenges in the retirement system. By leveraging the strengths of both programs, we can create a more robust and efficient retirement savings ecosystem that benefits millions of American workers.
Two Saver’s Match Resources Now Available
Retirement Clearinghouse (RCH) has launched two new Saver’s Match resources, which offer plan sponsors, plan providers and participants with consolidated information about the Saver’s Match program, as well as a new saver-focused tool – the Saver’s Match Estimator – which will calculate an estimated matching contribution under the program. RCH encourages everyone to use the new tools, and to share them within their network.
Taking Stock of the Saver’s Match: The Promise and The Challenges
Slated to begin operation with the 2027 tax year, the Saver’s Match program is coming more sharply into focus. While research is still ongoing, the picture being revealed is one of massive potential to increase retirement savings and to help close the minority wealth gap. These benefits may not come easily, given the sheer size of the population affected by the Saver’s Match, and the challenges that the program could face in getting up-to-speed. At the Annual iOme Challenge Forum, held on 6/20/24 by the Women’s Institute for a Secure Retirement (WISER), RCH & PSN President and CEO Spencer Williams, along with Morningstar’s Jack VanDerhei, took stock of both the promise and the challenges represented by the Saver’s Match program.
Safe-Harbor IRAs Don’t Offer a Long-Term Saving Solution for Plan Participants
Writing in the RCH Consolidation Corner blog, RCH and PSN President & CEO Spencer Williams reflects on the 20-year history of safe harbor IRAs, which were intended to be "a temporary solution to the problem of too many small, stranded accounts in defined contribution plans." Williams provides readers with examples of the dysfunction that has occurred when safe harbor IRAs have failed to act as long-term repositories of savings, or worse, when participants cash out completely. With the advent of auto portability, Williams maintains that the new auto feature will "allow participants to maximize the time retirement savings are invested in their plan accounts—and minimize the time those balances are languishing in underperforming safe-harbor IRAs along the journey to retirement."
Robert L. Johnson Gives Keynote Address at 2024 EBRI Spring Policy Forum
On May 16th, Robert L. (Bob) Johnson, Chairman of The RLJ Companies, Retirement Clearinghouse (RCH) and the Portability Services Network (PSN), delivered the keynote address to the 2024 EBRI Spring Policy Forum, co-hosted by the American Benefits Council. In Johnson’s address, entitled “Helping to narrow the nation’s lingering racial wealth gap” – the legendary Black American entrepreneur gave Forum attendees insight into the businessman’s long, purpose-driven journey to create entrepreneurial solutions to social problems, including his current efforts in the retirement sector, where he’s become laser-focused on leveraging public/private sector solutions that narrow the wealth gap for minorities and women.
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