Read the latest blog posts by Retirement Clearinghouse addressing the problem of uncashed checks in defined contribution plans.


A More-Enlightened Approach to Uncashed Distribution Checks

No retirement plan sponsor likes the idea of dealing with uncashed distribution checks, nor do they wish to draw unwanted regulatory attention or to become embroiled in costly litigation. Unfortunately, many plan sponsors place themselves in precisely that spot, becoming unnecessarily over-burdened with unresolved uncashed checks, while inviting unwanted regulatory scrutiny and/or legal challenges by having flawed uncashed check policies. In his 2/8/24 article in RCH's Consolidation Corner blog, Tom Hawkins lays out a "more-enlightened" approach to the problem of uncashed distribution checks, seeking to minimize their numbers, while simultaneously steering clear of the “red flags” that could land them in hot water.


As Time Passes, The Gains Become Harder

RCH's Tom Hawkins, writing in the Consolidation Corner blog, observes that our nearly 45 year-old defined contribution system may face diminishing returns as it tries to generate future growth, and should focus on quality and efficiency as it simultaneously expands access. Using fitness as an analogy, Hawkins offers a "workout plan" for the DC system, including plugging leakage through increased portability and emergency savings, while fostering increased retirement savings consolidation to avoid an explosion in small accounts. When combined with expanded access initiatives, these measures can dramatically increase Americans' retirement security, over and above expanding access alone.


Dialing Up the Intensity of Missing Participant Searches

Writing in RCH’s Consolidation Corner blog, Tom Hawkins helps plan sponsors understand how and when they should increase the intensity of their missing participant searches. When it comes to locating missing retirement plan participants, Hawkins notes that “there’s no substitute for an effective electronic, or ‘e-search.’ However, retirement plan sponsors will inevitably encounter scenarios where periodic e-searches alone will not suffice.” Hawkins provides plan sponsors with six actionable steps to increase search intensity and offers tips on how to minimize the cost & effort associated with missing participants.


Why Missing Participants Are So Misunderstood

Writing in the Consolidation Corner blog, RCH's Tom Hawkins examines the topic of missing participants, which he states: "is a problem that’s ill-defined and poorly understood, and where fundamental misunderstandings exist, inadequate solutions – paired with the prospect of unwanted regulatory attention or audits – can follow." Hawkins asserts that "taking proactive steps to conduct searches, and turning on plan features that promote retirement savings portability are the key steps required to getting off the missing participant treadmill."


401(k) Portability in Four Movements

RCH's Tom Hawkins examines the experience of a very large (250,000+ participants) 401(k) plan sponsor that has been highly successful in delivering improved participant outcomes by incrementally adopting a full program of retirement savings portability. Looking at four distinct five-year periods that coincided with increasing levels of portability and improved participant outcomes, Hawkins writes that "there’s no finer example of those [improved] outcomes than the multi-year, real-world experience of this plan sponsor, where thousands of participants increased their prospects for a timely and comfortable retirement."


The ‘Fix’ for Missing Participants, Uncashed Distribution Checks and Forgotten Accounts

Auto portability has received a lot of well-deserved attention for its ability to reduce cashout leakage by automatically consolidating small-balance retirement savings, but its effect on preserving participants’ retirement savings is only half of its compelling story. In this article in the RCH Consolidation Corner blog, Tom Hawkins explores how auto portability can also act as the 'fix' for the related problems of missing participants, uncashed distribution checks and small, forgotten 401(k) accounts.


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.


Broadcast Retirement Network Features Segment on ‘Small Account Problem’

On Wednesday, 11/4/20 the Broadcast Retirement Network’s Jeff Snyder interviewed Retirement Clearinghouse (RCH) President & CEO Spencer Williams and Alight Solutions’ Vice President & Head of Research Rob Austin to address the 401(k) system’s small account problem – where high levels of cashout leakage in small balance segments perennially robs millions of participants of a timely or comfortable retirement.