Auto Portability in the News
Browse the most comprehensive collection of articles in the media that feature auto portability.
Tax Day is coming — a perfect time to teach millennials why they shouldn’t cash out
April 15 is just around the corner. While many Americans dread Tax Day, April 15 presents defined contribution plan sponsors with an opportunity to demonstrate their value as fiduciaries, and as financial wellness advocates. Anyone who is 18 or older, not a full-time student, and not claimed as a dependent on someone else’s tax return is eligible for a retirement savings contributions credit (also known as a saver’s credit). This tax credit rewards people for making eligible contributions to their IRAs or employer-sponsored retirement plans. In his latest article in Employee Benefit News, Retirement Clearinghouse CEO Spencer Williams advocates for Millennials to invest the credit in their retirement plan, rather than spend it.
Tax Day is Coming—Encourage Millennial Participants to Incubate Saver’s Credits
With Tax Day (April 15) just around the corner, RCH's Spencer Williams advises plans and their participants to take advantage of the Saver's Credit, a tax credit that rewards eligible IRA and plan contributions. Nurturing these contributions not only promotes savings, says Williams, but also makes participants less-likely to cash out their 401(k) balances as they change jobs. Turning to Millennials, Williams addresses the Financial Independence, Retire Early (FIRE) movement, cites the latest research from EBRI indicating that Millennials' retirement prospects are significantly improved by auto portability, and provides several illustrations to make the point.
Shorter Employee Tenure Demands Progressive Plan Design
PLANSPONSOR's Amanda Umpierrez examines the latest research from EBRI revealing decreasing employee tenure, concluding that shorter tenure could adversely impact retirement plan success. Umperriez quotes RCH EVP Neal Ringquist, who ties decreasing tenure to destructive outcomes, such as cashing out, and RCH CEO Spencer Williams, who advocates for immediate plan eligibility and adoption of automatic enrollment provisions. Finally, EBRI's Craig Copeland, author of the research, addresses the beneficial impact of auto portability, stating that “[a]uto-portability will play an increasingly important role because it helps a lot with balance preservation.”
EBRI Webinar Extends Auto Portability’s Benefits to Young Millennials
In their March 20th webinar "Achieving Retirement Income Equivalency Between Final-Average-Pay Defined Benefit Plans and Automatic Enrollment 401(k) Plans in the Private Sector", the Employee Benefits Research Institute (EBRI) revealed more research supporting the case for auto portability, with their finding that auto portability could dramatically improve defined contribution plan performance for young Millennials.
Auto-portability: A way to address 401(k) leakage
In his 3/22/19 article in BenefitsPRO, Pentegra's RIchard Rausser advocates for auto portability as a means to address the serious problem of "leakage" from the 401(k) retirement system. Rausser's article first looks to research from the Center for Retirement Research (CRR) and the Government Accountability Office (GAO) to underscore the dimensions of the leakage problem, and goes on to cite EBRI research that demonstrates the positive impact of auto portability. Rausser concludes by referencing the DOL's November 2018 actions on RCH's auto portability program, including the pending prohibited transaction exemption, stating that "others in the industry are strongly in favor of auto-portability."
How Auto Portability Serves the Best Interest of 401k Participants-Part 1
In his five-part series in 401kSpecialist, RCH's Tom Hawkins identifies five key reasons why an auto portability program serves the best interests of plan participants. Part 1 of the series examines the dramatically improved participant outcomes that result from a program of auto portability. Those outcomes, Hawkins contends, demonstrate that plan sponsors who adopt auto portability are acting prudently and solely in the interests of their plan’s participants and beneficiaries.
Asset Consolidation: Facilitating participant roll-ins
In its Feb-March 2019 edition, PLANSPONSOR Magazine addresses the topic of asset consolidation, taking the position that plan sponsors who promote in-plan consolidation (“roll-ins”) are benefiting both their plans and participants. The article cites key findings from RCH’s 2015 Mobile Workforce study, and quotes RCH President & CEO Spencer Williams, who maintains that a clear connection exists between roll-ins and financial wellness. Finally, the article updates readers on auto portability, with the DOL‘s November 2018 actions providing clarity for RCH's Auto Portability program, and as Williams explains, “set[ting] a new standard of care for automatic rollovers.”
How Auto Portability Serves Participants’ Best Interests - Part 2: An Enhanced Standard of Participant Care
In the second installment of his five-part series "How Auto Portability Serves Participants' Best Interests", RCH's Tom Hawkins examines how auto portability, by extending and
enhancing elements of automatic rollovers, establishes a new standard of
participant care. Auto portability, writes Hawkins, protects participants by: 1) minimizing time spent in a safe harbor IRA, 2)
eliminating the need to cash out balances less than $1,000, 3) enhancing
participant communication, 4) formally integrating a robust address location
search and 5) establishing a transparent, simple & straightforward fee
structure.
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