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Consolidation Corner Blog
Consolidation Corner is the Retirement Clearinghouse (RCH) blog, and features the latest articles and bylines from our executives, addressing important retirement savings portability topics.
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.
The ‘Great Resignation’ Screams for Improved Retirement-Savings Portability
RCH President and CEO Spencer Williams, writing in the RCH Consolidation Corner blog, breaks down the phenomenon known as The Great Resignation. Williams makes a compelling case that -- for defined contribution plans -- seamless plan-to-plan portability, including auto portability, are absolutely vital to preserving affected participants' retirement savings, and in ensuring that their retirement savings balances are moved forward when they re-enter the workforce.
Robert L. Johnson, Majority Owner of Retirement Clearinghouse, Secures Endorsement of Two Civil Rights Organizations for Auto Portability
Robert L. Johnson, Founder and Chairman of The RLJ Companies and majority owner of Retirement Clearinghouse (RCH), has secured endorsements for auto portability from two premier civil rights organizations – the National Urban League, and the National Association for the Advancement of Colored People (NAACP) – both with over a century of experience advocating for solutions that address the inequities and economic challenges experienced by Black Americans and by other communities of color. Renée Wilder Guerin, RCH Executive Vice President, Public Policy, summarizes these major developments in RCH's Consolidation Corner.
Four Reasons Why 401(k) Auto Portability is Inevitable
RCH's Tom Hawkins, writing in the Consolidation Corner blog, offers an optimistic assessment of the prospects for auto portability. Hawkins, who admits to being a "a long-time, unabashed proponent" of auto portability, now believes that the feature's eventual, widespread adoption is "inevitable" and supports his position with four key points.
Kennedy Townsend: Solving Portability and Cashout Leakage are a Key DOL Priority
On 12/6/21, Kathleen Kennedy Townsend, Special Assistant to the Secretary of Labor for Retirement, served as the keynote speaker at EBRI's 90th Public Policy Forum, and outlined the big-picture, retirement-focused priorities of the DOL. One of the DOL's three priorities is the issue of portability and leakage. RCH's Tom Hawkins examines Townsend's remarks to her EBRI audience, which revealed that she has a clear grasp of the magnitude of the cashout leakage problem, as well as its most-promising solution – enabling plan-to-plan portability.
Three New Year’s Resolutions for 401(k) Plan Sponsors
As 2021 comes to a close, RCH EVP Neal Ringquist offers 401(k) plan sponsors his suggestions for three 2022 resolutions that, if acted on, could deliver significant benefits for their plans, for their participants and ultimately for the entire 401(k) ecosystem. Ringquist bases his suggestions on several pivotal events that occurred in 2021, underscoring the need to deploy true plan-to-plan portability to solve the problem of cashout leakage.
A Brief History of Auto Portability
Auto portability is a new “automatic” plan feature rapidly gaining acceptance by large defined contribution recordkeepers. While the feature is relatively new, it’s tempting to view auto portability as an “overnight success.” In fact, auto portability has been a long time in the making. In his latest Consolidation Corner article, as well as in an embedded video, RCH's Tom Hawkins examines a “brief history” of auto portability.
Assessing the State of DC Plans & Retirement Savings, 15 Years After the Pension Protection Act
Marking the 15th anniversary of the Pension Protection Act (PPA), RCH President & CEO Spencer Williams offers readers his views on the unintended consequences of that legislation that “continue to reverberate” for both plan participants and sponsors. Acknowledging that the automatic enrollment feature has been successful in promoting increased plan participation, Williams notes that the feature has also resulted in a “sharp uptick in small, stranded 401(k) savings accounts” that – absent easy plan-to-plan asset portability – has led to increased participant fees as well as higher levels of cash outs. In response, Williams observes that “the private and public sectors have worked together to create solutions” such as auto portability, which can help rectify the PPA’s flaws, and allow Americans to save more for retirement.