Auto Portability in the News
Browse the most comprehensive collection of articles in the media that feature auto portability.
4 Retirement Initiatives Vital to Closing the Racial Wealth Gap
Writing in 401k Specialist, RCH's Tom Hawkins examines four retirement initiatives that could help in closing America's racial wealth gap. Leading off the article, Hawkins cites U.S. Treasury research identifying a significant racial wealth gap that has remained essentially unchanged over the past 20 years. In the retirement space, Hawkins identifies expanded access, auto portability, emergency savings and the Saver's Match as key initiatives that will make significant contributions to closing the gap, provided that retirement plan sponsors fully embrace and support them.
Department of Labor Releases Proposed regulation on Retirement Plans and Automatic Portability Transactions When Employees Change Jobs
On January 18th, 2024 the Department of Labor's (DOL) Employee Benefits Security Administration (EBSA) released proposed regulations on automatic portability transactions under the SECURE 2.0 Act of 2022. In the press release accompanying the proposed rules, EBSA Assistant Secretary Lisa Gomez remarked: “With the widespread adoption of these accounts, there is a particular need for automatic portability solutions that help ensure participants remain connected to their retirement savings when they change jobs." The Notice of Proposed Rulemaking was posted on the department’s website and will be published in the Federal Register with a 60-day public comment period and instructions on how to submit comments.
No more 401(k) plan ‘leakage’: SECURE 2.0 auto-portability now in effect
BenefitsPRO's Scott Wooldridge looks ahead in 2024, writing that the year "will mark changes to the retirement savings system, in part due to the new SECURE 2.0 law, that will enable more auto-portability of 401(k) retirement accounts." To support that view, Wooldridge identifies the formation of the Portability Services Network (PSN), and quotes Retirement Clearinghouse (RCH) and PSN Chairman Robert L. Johnson, who sees "great interest from employers" in auto portability. Wooldridge also summarizes key findings from RCH's newly-updated Auto Portability Simulation (APS) model, which indicates greater benefits will be associated with auto portability -- and particularly for minorities -- as a new mandatory distribution limit goes into effect in 2024, and as expanded access initiatives gain momentum.
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Will 401k Auto-Portability Became A Cure-All Or A Fiduciary Headache?
Fiduciary News' Chris Carosa examines 401k auto portability, attempting to determine whether the new automatic feature represents a "cure-all" or could become a fiduciary "headache" for risk averse plan sponsors. Carosa turns to an assortment of legal minds, advisors and industry pundits who weigh in on the question. On the positive side, Carosa's sources affirm that "auto-portability does offer plenty of advantages, especially to plan participants" in reducing cashout leakage, preserving small-balance retirement savings and helping plan sponsors to "benefit from auto-enrollment through reduced administration expenses incurred supporting inactive accounts." On the flip side, naysayers cite auto portability's negative consent, the potential for creating a "slippery slope" towards "government overreach" and its supposed inability to accommodate retirees.
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Four Retirement Initiatives Vital to Closing the Racial Wealth Gap
Writing in the RCH Consolidation Corner blog, Tom Hawkins examines four retirement initiatives that could help in closing America's racial wealth gap. Leading off the article, Hawkins cites U.S. Treasury research identifying a significant racial wealth gap that has remained essentially unchanged over the past 20 years. In the retirement space, Hawkins identifies expanded access, auto portability, emergency savings and the Saver's Match as key initiatives that will make significant contributions to closing the gap, provided that retirement plan sponsors fully embrace and support them.
New SECURE 2.0 regulations now in effect in 2024: Is your 401(k) in compliance?
Writing in BenefitsPRO, Jennifer Tanck, Executive Vice President of Pensionmark, informs readers about the key SECURE 2.0 provisions that will affect plan sponsors in 2024. Addressing auto portability, Tanck writes that "[t]he SECURE 2.0 Act now codifies automatic portability" and "permanently approves the negative consent of rollovers of small balances to a terminated employee’s new employer through the Retirement Clearinghouse. The threshold for these rollover amounts has been increased from a maximum of $5,000 to $7,000 for 2024."
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Auto portability is poised to make an even bigger impact in 2024
Writing in Employee Benefit News, RCH President & CEO Spencer Williams looks ahead to the New Year, when a key provision of the SECURE 2.0 Act—increasing the limit on small 401(k) accounts subject to automatic rollovers into safe-harbor IRAs from $5,000 to $7,000—goes into effect. While this development will cause more job-changing participants to be subject to automatic rollover provisions, the advent of auto portability could mean that these participants could ultimately fare much better, as auto portability's adoption accelerates. Williams references new results from RCH's Auto Portability Simulation (APS), which indicate that the new provisions -- when combined with auto portability -- could deliver even greater benefits in terms of reducing cashout leakage and preserving retirement savings, and offers plan sponsors with two New Year's resolutions to proactively respond to the changes.
Retirement Clearinghouse Notes 4 Key Findings on Auto-Portability
Writing in PlanAdviser, Natalie Lin reports on Retirement Clearinghouse (RCH) releasing an updated version of their Auto Portability Simulation (APS). Lin observes that the new simulation model incorporates new data and assumptions and is supportive of the industry-led initiative undertaken by the Portability Services Network, a consortium of large defined contribution recordkeepers dedicated to auto portability's adoption. In addition to summarizing the study's key findings, Lin writes that "[t]he study supports the consortium’s ultimate goal of getting all retirement plans in the country to automatically port over small balances instead of cashing them out to the participant or pushing them into an individual retirement account."