Jan
25
2021

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.

Oct
05
2020

The Explosion of Small-Balance IRAs

In his latest post in RCH's Consolidation Corner, RCH's Tom Hawkins examines EBRI's 10/1/20 Fast Facts - Losing Ground Safely: Small IRAs’ Large Stake in Money - which offers new insight into the magnitude of a small-balance IRA “explosion” being fueled by automatic rollovers, as well as the sub-optimal retirement outcomes they produce. EBRI's new information provides yet another data point in favor of 401(k) consolidation via auto portability and could serve to inform future regulatory guidance by expanding auto portability’s mandate to consolidate these previously “stranded” safe harbor IRAs back into our 401(k) system.

Jun
19
2020

401(k) Cashout Leakage: A Reality, Not a “Narrative”

In his latest article in Consolidation Corner, RCH's Tom Hawkins provides his take on the topic of 401(k) cashout leakage, examining a recent study by the Investment Company Institute (ICI). Hawkins writes that the ICI study -- while using an innovative approach to mine 2010 tax data -- fell short in providing accurate or timely estimates of 401(k) cashout leakage levels, which are best-reflected in research conducted by EBRI, by large recordkeepers and summarized by the Savings Preservation Working Group.

Feb
24
2020

New Research Confirms Clear Shift Towards Plan-to-Plan Portability

In his latest article in RCH's Consolidation Corner, RCH's Neal Ringquist observes that 401(k) plans have become more-and-more “institutionalized" -- yet the benefits of that increased institutionalization are being lost to large numbers of participants who cash out their 401(k) balances when they change jobs. Now, there’s clear evidence that plan sponsors understand the value of plan-to-plan portability in preserving 401(k) plans’ institutional benefits, and that a shift towards already-available portability solutions is underway.
Nov
19
2019

The Surprising Migratory Patterns of Job-Changing Participants

In his latest Consolidation Corner article, RCH President & CEO Spencer Williams utilizes EBRI data to examine the migratory patterns of job-changing participants. Looking specifically at the size of their former employers' plans (expressed in terms of numbers of participants) compared to the size of their most-recent active plan, Williams finds that the vast majority (82.98%) of these participants go to an employer with a plan equal in size, or larger than, their former employer’s plan. Only 17.02% of participants go to employers with smaller plans, and a mere 1.9% leave employers with large plans to go to an employer with a small plan (less than 100 participants). This data, says Williams, should significantly allay industry concerns that the adoption of auto portability for small balances could result in harmful participant outcomes.

Aug
21
2019

The Magnitude of the 401(k) Cashout Leakage Problem

In his five-part series in Consolidation Corner, RCH's Tom Hawkins sheds light on the problem of cashout leakage, a silent crisis that unnecessarily robs millions of Americans of their retirement security. In his third article in the series, Hawkins examines the magnitude of the 401(k) cashout leakage problem, sharing new statistics recently supplied by EBRI, and offering some interesting comparisons so the reader can fully-grasp the enormity of the problem.

Jul
26
2019

The Demographics of 401(k) Cashout Leakage

In his five-part series in Consolidation Corner, RCH's Tom Hawkins sheds light on the problem of cashout leakage, a silent crisis that unnecessarily robs millions of Americans of their retirement security. In his second article in the series, Hawkins examines the demographics of 401(k) cashout leakage, identifying those segments of the population most impacted by the problem, as well as those who stand to benefit the most from a solution.

Apr
24
2019

LIMRA Webinar Features Michael Kreps’ Update on Auto Portability

On April 16th, as part of their Strategic Issues Webinar Series, the LIMRA Secure Retirement Institute delivered the webinar Regulatory and Legislative Trends Impacting the U.S. Retirement System, featuring presenter Michael Kreps, Principal, Groom Law Group, and a highly-influential voice in DC on retirement public policy. Kreps provided an insider's update on auto portability, which he characterized as having the potential to deliver “an enormous boost to the industry and to participants in general.”
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