Media Coverage

Vanguard Joins the Auto Portability Clearinghouse

Writing in RCH's Consolidation Corner blog, Executive Vice President Neal Ringquist addresses the 9/21/21 press release by Vanguard that it will engage with RCH to introduce the RCH Auto Portability program to their defined contribution plan sponsor clients in mid-2022. Ringquist supplies readers with important perspective, stating: "Vanguard’s announcement is a major milestone in RCH’s ongoing efforts to deliver seamless, plan-to-plan portability to America’s defined contribution system. RCH Auto Portability has now been embraced by two of America’s top ten defined contribution recordkeepers, collectively serving almost 10 million employees."

401k Auto Portability’s Significant Benefits to Pending Legislation

Writing in 401k Specialist Magazine, RCH's Tom Hawkins recaps a 9/13/21 Employee Benefit Research Institute (EBRI) webinar (The Impact of Proposed Legislative Changes on Retirement Income Adequacy). In the webinar, EBRI Research Director Jack VanDerhei presented an analysis of pending legislative changes, including automatic contribution plans and arrangements (ACPAs), paired with a refundable saver’s credit. Unsurprisingly, the benefits for these policy initiatives were quite large. However, what was truly surprising was the sheer magnitude of incremental benefits delivered by the addition of auto portability, significantly paring retirement shortfalls for 35–39-year-olds, across all race and ethnicity categories.

EBRI Research Reveals Auto Portability’s Massive Incremental Benefits to Pending Legislation

In a 9/13/21 Employee Benefit Research Institute (EBRI) webinar (The Impact of Proposed Legislative Changes on Retirement Income Adequacy), EBRI Research Director Jack VanDerhei presented an analysis of pending legislative changes, including automatic contribution plans and arrangements (ACPAs), paired with a refundable saver’s credit. Unsurprisingly, the benefits for these policy initiatives were quite large. However, what was truly surprising was the sheer magnitude of incremental benefits delivered by the addition of auto portability, significantly paring retirement shortfalls for 35–39-year-olds, across all race and ethnicity categories.

Does The ‘Great Resignation’ Make Auto-Portability’s Case?

Writing in 401k Specialist Magazine, Editor-in-Chief John Sullivan astutely links the unusually high turnover in labor markets (the "Great Resignation") to the need for auto portability. Disproportionately affecting Black and Hispanic Americans, Sullivan writes that this unprecedented turnover could "potentially wreak havoc with orphaned retirement accounts and missing participants" and further states "[i]f ever there was a time—and need—for auto portability, this may be it."

Beware of Unintended Effects of Retirement Savings Public Policies

Writing in 401k Specialist Magazine, RCH's Tom Hawkins examines the unintended effects that can result from retirement savings public policies that would dramatically expand access to, and participation in, defined contribution plans. While the benefits are impressive, additional undesired consequences can arise that are antithetical to the policies’ original intent, including increased cashout leakage, missing participants, uncashed checks and forgotten/stranded accounts. Understanding these highly predictable "second order" effects, Hawkins identifies plan-to-plan portability as an effective means of addressing them, while significantly boosting the overall policies’ benefits.

Beware of Second Order Effects for Retirement Savings Public Policies

RCH's Tom Hawkins examines “second order effects” that can occur with retirement savings public policies currently that would dramatically expand access to, and participation in, defined contribution plans. While the benefits are impressive, additional undesired consequences can arise that are antithetical to the policies’ original intent, including increased cashout leakage, missing participants, uncashed checks and forgotten/stranded accounts. Understanding these highly predictable second order effects, Hawkins identifies plan-to-plan portability as a means of addressing them, while significantly boosting the overall policies’ benefits.

Refundable Saver’s Tax Credits Would Significantly Reduce Retirement Savings Shortfall—Especially for Minorities

Writing in RCH's Consolidation Corner, RCH President & CEO Spencer Williams examines pending retirement savings legislation, and focuses upon the benefits of a refundable saver's credit, which would be directly deposited into taxpayers' 401(k) and IRA accounts. Taking his analysis a step further, Williams considers the infrastructure required to transfer these funds to savers, and identifies considerable synergies with the existing technology that supports auto portability.

Don’t relegate lost and missing accounts to the lost and found — consolidate them in the retirement system

Writing in Employee Benefit News, RCH President & CEO Spencer Williams opines on draft provisions in SECURE 2.0 legislation that call for establishment of a “lost & found” – including housing sub-$1,000 balances for all terminating 401(k) participants. As proposed, Williams observes that simply moving sub-$1,000 balances to the PBGC does little to reduce cashouts or stranded savings and offers auto portability as a “far more constructive method” to reduce cashouts and to promote consolidation of retirement savings.

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