Media Coverage

Why Auto Portability is Good for Your Retirement

Writing in IRIS, Joseph Conroy, CFP of Synergy Financial Group, examines auto portability from the perspective of the participant. Comparing participant outcomes that occur under the current system vs. those under auto portability, Conroy concludes that auto portability's benefits to participants are compelling, stating that "auto portability would be a benefit for retirement savers, both in the prevention of leakage and in streamlining accounts."

Auto Portability Boosts 401(k) Plan Results in New EBRI Research

RCH's Tom Hawkins examines new research, authored by EBRI Research Director Jack VanDerhei, Ph.D., comparing the retirement income generated by 401(k) plans with auto enrollment against defined benefit (DB) plans. While EBRI's primary objective was to address growing concern over the relative decline of DB plans, the study also identified significant, incremental benefits of auto portability, adding to a growing body of research from EBRI demonstrating that auto portability increases retirement security for 401(k) participants.

PlanAdviser: Senate Testimony Supports Auto Portability

PlanAdviser's Rebecca Moore, covering testimony offered to the Senate Special Committee on Aging, reports that Gene L. Dodaro, Comptroller General of the United States and head of the Government Accountability Office (GAO) "touted automatic enrollment and auto portability as ways DC plan enrollment and contribution levels can be encouraged." The Committee's hearing, held 2/6/19, addressed the topic "Financial Security in Retirement: Innovations and Best Practices to Promote Savings" and also included testimony from John Scott (The Pew Charitable Trusts), Linda K. Stone (WISER) and Denis St. Peter (CES, Inc.).

PLANSPONSOR: Senate Testimony Supports Auto Portability

PLANSPONSOR's Rebecca Moore, covering testimony offered to the Senate Special Committee on Aging, reports that Gene L. Dodaro, Comptroller General of the United States and head of the Government Accountability Office (GAO) "touted automatic enrollment and auto portability as ways DC plan enrollment and contribution levels can be encouraged." The Committee's hearing, held 2/6/19, addressed the topic "Financial Security in Retirement: Innovations and Best Practices to Promote Savings" and also included testimony from John Scott (The Pew Charitable Trusts), Linda K. Stone (WISER) and Denis St. Peter (CES, Inc.).

DB vs DC Outcomes Determined by Generosity, Design

Examining the 2/7/19 EBRI Research Brief comparing DB vs. DC plans, PlanAdviser's John Manganaro cites the study as finding that DB break-even accrual rates required for equivalency to their 401(k) counterparts are "rarely less than 1.5% of final pay." Under a scenario where auto portability is combined with the 401(k) plans, the DB break-even accrual rates increase further to deliver equivalency, with auto portability's impact "greatest among the lowest income quartile."

EBRI Reassesses Whether DC or DB Plans Are Better for Participants

PLANSPONSOR's John Manganaro examines EBRI Research Brief #473, released 2/7/19, which compares the outcomes of participants in automatic enrollment 401(k) plans versus defined benefit (DB) plans. Manganaro quotes the study as finding that DB break-even accrual rates required for equivalency to their 401(k) counterparts are "rarely less than 1.5% of final pay." Under a scenario where auto portability is combined with 401(k) plans, the DB break-even accrual rates increase further to deliver equivalency, with auto portability's impact "greatest among the lowest income quartile."

RCH's Spencer Williams on Auto Portability's Benefits to Minorities

In his latest article in Employee Benefit News, RCH President & CEO Spencer Williams addresses the headwinds facing minorities in saving more for their retirement, including significantly higher rates of job turnover and cash-out leakage. Building on statements by RCH Chairman Robert L. Johnson at a December 2018 White House event, Williams makes the case that – for minority savers – auto portability could preserve up to $1.4 trillion in retirement savings, over a generation. Williams concludes that auto portability represents the “best, and easiest, way for sponsors and their service providers” to address the problem.

PLANSPONSOR: Groom's Saxon Welcomes DOL's Auto Portability Guidance

In the January 2019 edition of PLANSPONSOR magazine, Groom Law Group's Stephen Saxon welcomes the U.S. Department of Labor's (DOL) November 2018 guidance on the RCH auto portability program. The DOL, says Saxon, "clarifies important questions about the fiduciary implications for plan sponsors" and provides "much welcome comfort" to plan fiduciaries considering the program. Saxon concludes his analysis by stating that "auto-portability will have a positive, long-term impact on the U.S. retirement system by reducing leakage and enabling American workers to consolidate their small retirement balances on an efficient basis."

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