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Retirement plan portability blog posts
Proof Positive: Retirement Savings Portability Works
We’ve long known – through sophisticated models such as EBRI’s Retirement Security Projection Model (RSPM) and the RCH Auto Portability Simulation Model – that retirement savings portability has the potential to significantly reduce cashout leakage and to generate systemic benefits. But models, however sophisticated they may be, can be inherently less convincing than hard, empirical data. In this RCH Consolidation Corner article, Tom Hawkins provides readers with definitive, real-world empirical data proving that portability not only works – it works at scale – and will deliver consistent results over many years and for millions of job-changing participants.
Auto Portability: Meeting the Needs AND Wants of Participants
When American workers change jobs, the fate of their retirement savings is often left hanging in the balance – especially for those with accounts less than $7,000. But today, with the continuing adoption of auto portability via the Portability Services Network, the story is changing. Auto portability is now beginning to address the most pressing needs of small-balance participants: reducing cashout leakage, automating consolidation, and making the preservation of retirement savings the default, “easiest choice” – while also closely aligning with what participants want, as revealed in multiple, authoritative surveys.
Why Preserving Small Balances Matters (and How Auto Portability Helps)
The preservation of small-balance 401(k) accounts – particularly those under $7,000 and subject to 401(k) plans’ automatic rollover provisions – represents an important challenge for America’s retirement system. In his 6/26/25 article in RCH's Consolidation Corner blog, Tom Hawkins examines four compelling arguments for the importance of preserving small balances, while demonstrating how auto portability, as delivered by the Portability Services Network (PSN), can help achieve this goal.
Come On In, The Water’s Fine
RCH’s Tom Hawkins, writing in the Consolidation Corner blog, shares his perspective on a recent public position taken by PensionBee, who drew attention to the “participant-unfriendly nature of some safe harbor IRAs” and suggested that “plan sponsors may risk breaching their fiduciary duty to plan participants by utilizing them.” Hawkins generally agrees but notes that the firm “didn’t go far enough” and offers readers with three areas of additional concerns that support this view. The piece concludes by offering plan sponsors with tips and resources to avail themselves of, should they wish to “take a hard look at their automatic rollover programs.”
On Earth Day, Consider Auto Portability to ‘Recycle’ 401(k) Savings
On April 22nd, we celebrate the 55th annual Earth Day, and
that gives RCH’s Tom Hawkins the opportunity to consider how the concept of
recycling applies to our nation’s 401(k) system, which Hawkins characterizes as
having a “waste problem” that manifests in the form of excessive cashout
leakage and stranded accounts. By contrast, auto portability represents a
sustainable solution that ‘recycles’ small-balance accounts, and its adoption
is rapidly accelerating following the operational status of the Portability
Services Network (PSN).
Here’s to the Future “Graduates” of Auto Portability
While auto portability’s immediate impact in reducing cashouts is well-documented, new insights reveal another powerful long-term effect: systematic balance consolidation that helps small-balance job-changing participants cross the vital $10,000 savings hurdle, where retirement security becomes self-reinforcing. Writing the RCH’s Consolidation Corner blog, Tom Hawkins characterizes this effect as “graduating” from auto portability and uses Auto Portability Simulation (APS) data to follow a hypothetical “class” of 100 small-balance job-changers through their first three jobs – where 36% compile a perfect record of savings preservation and balance consolidation.
The Accelerating Adoption of Auto Portability: A Market Adoption Theory Perspective
RCH’s Tom Hawkins, writing in the Consolidation Corner blog, examines the accelerating adoption of auto portability from the perspective of the tried-and-true theory of market adoption. Hawkins takes the position that auto portability is “on the cusp of becoming a mainstream feature in retirement plans” as it transits the innovator/early adopter phase and moves into the early majority phase, as described in the theory’s framework.
The Compelling Case for Women and Auto Portability
Auto portability will deliver broad-based benefits to America’s workforce, but research has shown that the new feature disproportionately benefits under-saved and underserved demographic segments, including minorities, women, lower-income and younger workers. Within those demographic segments, a very compelling case can be made for the importance of auto portability to women, who face unique retirement savings challenges that auto portability can help address.
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