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.


Jun
02
2020

COVID-19 Pandemic Demonstrates the Need for Institutionalized Portability

Writing in Consolidation Corner, RCH President & CEO Spencer Williams examines the disruptive effects of the COVID-19 pandemic on America's retirement savers, and makes a persuasive case for the systemic, institutional adoption of auto portability as a means to help rebuild and to preserve retirement savings over the long-term. In the near-term, Williams observes that reduced participant mobility make this an opportune time for sponsors to update participant addresses.

May
28
2020

A Critical Time to Protect the Vulnerable

Writing in Consolidation Corner, RCH's Tom Hawkins addresses the need to protect newly-terminated, vulnerable participants during the COVID-19 crisis. Hawkins points out that these participants are particularly vulnerable to financial emergencies, or in many cases, simply to poor decision-making. Hawkins urges sponsors to take additional steps to listen, to educate and to protect these participants -- not only during the crisis, but beyond.

Apr
28
2020

Let’s Extend the Spirit of the CARES Act to Automatic Rollover IRAs

In light of the COVID-19 crisis, RCH's Tom Hawkins examines another burden borne by millions of participants, when they’re furloughed or laid off and become subject to ‘traditional’ automatic rollover IRAs – where they’ll likely face high levels of cashouts, predatory fees and barriers to exit. Now, more than ever, it’s important for sponsors to act and to redress this burden. For sponsors utilizing traditional automatic rollover IRAs, Hawkins urges them to demonstrate their caring through three actions that will help address the problem and will deliver significant societal benefit.

Apr
20
2020

To Show Participants You Care, Help Them Avoid Cashing Out Post-CARES Act

As participants affected by the COVID-19 crisis consider whether or not to withdraw retirement savings under provisions of the CARES Act, RCH’s Spencer Williams offers plan sponsors constructive advice for engaging them.Writing in RCH’s Consolidation Corner, Williams acknowledges the need for millions to have a “financial lifeline” but suggests that sponsors remind participants via email communications and digital content “that their retirement savings should be considered a last resort for meeting emergency expenses, especially during the present crisis.”

Mar
27
2020

Think Twice Before Tapping Your 401(k) for Short-Term Needs

Responding to the Wall Street Journal's 3/20/20 article “The Emergency 401(k) Button” with a letter to the Editor, RCH President & CEO Spencer Williams urges 401(k) savers to exercise caution when considering whether or not to cash out their savings. A hasty decision could result in "the loss of years of compound interest and investment growth that won't be there for retirement" writes Williams, citing a hypothetical 30-year-old, who cashes out $5,000, but stands to lose $52,000 in retirement earnings. Borrowing now, says Williams, is easier than borrowing in retirement, and your "70-year-old self will thank you" for your restraint.

Mar
20
2020

How Does Auto Portability Work? Watch the Video

Looking for a quick primer on how auto portability works? Watch the video embedded in this RCH Consolidation Corner article, which walks you through the four-step process. The video also introduces you to the key elements of participant communication that occur along the way. Enjoy!

Mar
16
2020

The Institutionalization of Portability is Key to Reducing Cash-Out Leakage

In his latest article in Consolidation Corner, RCH President & CEO Spencer Williams identifies plan-to-plan portability as a vital feature to prevent cashout leakage. Similar to the progress that's been made over the past decade in reducing plan fees, Williams makes the case that the inevitable "institutionalization" of portability will dramatically reduce cashout leakage and maximize participants' retained savings. Williams advocates for the adoption of a dual portability model, comprised of auto portability for small balances and a consent-based, concierge service for participants with larger balances.

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.
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