Auto Portability in the News
Browse the most comprehensive collection of articles in the media that feature auto portability.
Writing in 401kSpecialist, RCH's Tom Hawkins identifies clear, across-the-board indications that America's defined contribution (DC) system is entering a "new age" of plan-to-plan portability. Portability, Hawkins contends, is the "missing ingredient" that, when added to 401(k) plans, will resolve the damaging disconnect between America's highly-mobile workforce and their immobile retirement savings.
In his latest article in Employee Benefit News, RCH President & CEO Spencer Williams utilizes EBRI data to examine the migratory patterns of job-changing participants. Looking specifically at the size of their former employers' plans (expressed in terms of numbers of participants) compared to the size of their most-recent active plan, Williams finds that the vast majority (82.98%) of these participants go to an employer with a plan equal in size, or larger than, their former employer’s plan. Only 17.02% of participants go to employers with smaller plans, and a mere 1.9% leave employers with large plans to go to an employer with a small plan (less than 100 participants). This data, says Williams, should significantly allay industry concerns that the adoption of auto portability for small balances could result in harmful participant outcomes.
Writing in Lexology.com, the law firm Eversheds Sutherland LLP addresses notable 2019 ERISA guidance promulgated by the Department of Labor, including Advisory Opinions, Field Assistance Bulletins and Prohibited Transaction Exemptions (PTEs). For the 7 PTEs finalized in 2019, they single out RCH and auto portability, stating: "One exemption broke new ground. PTE 2019-02 granted relief for RCH’s auto-portability program, with respect to certain fees charged in connection with the transfer of accounts to the plan of a participant’s new employer."
Picking up on a theme from RCH President & CEO Spencer Williams, 401kTV Managing Editor Steff Chalk examines the quantifiable financial wellness benefits that could be realized by plan sponsors and their participants, via the adoption of auto portability. Linking to an article previously authored by Williams in Employee Benefit News, Chalk runs down the litany of persuasive proof points offered by Williams, concluding: "we couldn't have said it better."
Writing in Employee Benefit News, RCH President & CEO Spencer Williams examines the current state of financial wellness programs, and the challenges plan sponsors face in quantifying their benefits. Facilitating retirement savings portability -- by adopting auto portability for small balances or implementing an assisted roll-in program for larger balances -- can easily overcome this challenge by offering sponsors financial wellness initiatives that not only deliver excellent results, but can be readily measured.
At the outset of a new decade, RCH EVP & Chief Sales Officer Neal Ringquist pauses to reflect upon the highlights of a momentous year for auto portability, addressing key 2019 developments in regulation, research & public policy, webinars and media coverage, as well as providing readers with his forward-looking predictions for 2020.
CNBC personal finance reporter Greg Iacurci takes a look at the millions of Americans changing jobs each year, and concludes that consolidation of retirement savings -- particularly to a new workplace savings account -- is their best move. Stranded accounts, writes Iacurci, can cause a variety of problems, including forgotten savings, cash outs, sub-optimal investment choices and a difficult transition to retirement income. Iacurci quotes RCH President & CEO Spencer Williams, who states that “from a consumer perspective, the default should be 100% of the time to move your money [when changing jobs].”
Writing in Employee Benefit News, RCH President & CEO Spencer Williams observes that safe-harbor IRAs -- created by the EGTRRA-mandated automatic rollover process -- were never intended to be "permanent retirement savings vehicles." Too often, argues Williams, the relief plan sponsors realize from automatic rollovers comes at the expense of participant outcomes -- who experience high levels of cashouts, low investment returns and savings-depleting fees. With the advent of auto portability, participants will spend less time in a safe harbor IRA, and "plan sponsors no longer have to consider trading participant outcomes for administrative convenience."