Auto Portability in the News
Browse the most comprehensive collection of articles in the media that feature auto portability.
Re-Thinking the Automatic Rollover IRA
Selecting an automatic rollover IRA provider used to be easy. Most 401(k) plan sponsors simply accepted the solution offered through their recordkeeper or TPA. Others performed due diligence, using a limited set of criteria including basic fees, investment options and accountholder service. Few, however, considered the grim realities facing terminated participants forced out into safe harbor IRAs, including excessive cashouts, forgotten accounts, hidden fees, and barriers to exit. Now, it's incumbent upon plan sponsors to fundamentally “re-think” these programs, incorporating five new criteria to ensure that automatic rollover IRA programs are fiduciary-friendly, while dramatically improving participants’ retirement outcomes.
401k Portability in Four Movements: Case Study
Writing in 401k Specialist, 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."
How Technology Is Transforming Retirement Preparation
Entrepreneur's April Miller examines how technology is transforming retirement, and notes how auto portability can serve to reduce participant cashouts. Miller writes that "[p]eople are increasingly advocating for auto-portability features built into employers’ retirement plans. In short, they would automatically transfer savings to new, active savings accounts in cases where the funds are subject to mandatory distributions."
401(k) Auto Portability Can Improve Outcomes
Writing in 401kTV.com, Managing Editor Steff Chalk examines the dual impact that auto portability has on improving participant outcomes, while reducing fiduciary risk for plan sponsors. Chalk notes that auto portability helps address the problem of automatic cash-outs, which can create large volumes of uncashed checks -- resulting in poor outcomes and heightened fiduciary risks. "401(k) auto portability comes to the aid of plan sponsors" writes Chalk, adding: "401(k) auto portability has the potential to help mitigate sponsors’ fiduciary risk and reunite more participants with their hard-earned savings."
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."
How to Address the Achilles’ Heel of State Auto-IRA Programs
RCH's Tom Hawkins, writing in 401k Specialist, offers his view that state-sponsored auto-IRA programs, despite their potential size and strength, suffer from an obvious weakness, or "Achilles’ heel": a lack of retirement savings portability. Hawkins writes: "Without addressing their portability problem, auto-IRA programs could expand, but may never reach their full potential, housing large numbers of churning, small-balance accounts. However, with adequate support for portability both into and out of these programs, they could dramatically increase the odds that they deliver on their promise of building incremental retirement wealth for millions of Americans."
Addressing the Achilles’ Heel of Auto IRA Programs
Writing in the RCH Consolidation Corner blog, Tom Hawkins offers his view that state-based Auto IRA programs, despite their potential size and strength, suffer from an obvious Achilles’ heel: a lack of retirement savings portability. Hawkins writes: "Without addressing their portability problem, Auto IRA programs could expand, but may never reach their full potential, housing large numbers of churning, small-balance accounts. However, with adequate support for portability both into and out of these programs, they could dramatically increase the odds that they deliver on their promise of building incremental retirement wealth for millions of Americans."
Targeting small, uncashed 401(k) distribution checks can generate big savings
Writing in Employee Benefit News, RCH President & CEO Spencer Williams examines the ongoing problem of uncashed 401(k) distribution checks. Worker mobility, as well as the prevalence of automatic cash-outs for balances under $1,000, conspire to create an administrative burden as well as a significant fiduciary risk for plan sponsors. Auto portability, writes Williams, can “mitigate this exposure, and help participants increase retirement savings by significantly reducing the need for automatic cash-outs” -- an outcome that Williams describes as “a win-win.”
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