News

Prepare for Upcoming Changes to Retirement Plans for 2025

The Wagner Law Group's John Schultze, writing in JDSupra.com, informs readers about the upcoming SECURE 2.0-driven retirement plan changes that will formally take effect in 2025, including "automatic portability" for small terminated participant balances below $7,000. Schultze briefly outlines the elements of the legislation, and observes that "[m]any service providers have formed a consortium to facilitate automatic portability services."

Preparing for Next Round of SECURE 2.0 Provisions

PlanAdviser's Alex Ortolani takes stock of "another round of SECURE 2.0 Act of 2022 provisions....set to take effect at the start of the new year" including those affecting auto portability. Ortolani writes: "Another important development in 2025 is allowance for the automatic transfer of retirement savings from a default individual retirement account to a new employer’s retirement plan. The optional provision is intended to make it easier for employees to keep their savings in an employer-based plan when they switch jobs, with the potential to reduce cash-outs from the tax-advantaged system." Ortolani also notes the recent announcement from the Portability Services Network (PSN) regarding auto portability's adoption by 15,000 plans representing 5 million active participants.

401(k) Real Talk Episode 133: December 11, 2024

Wealth Management's Fred Barstein, host of 401(k) Real Talk, summarizes the retirement industry's key news of the week, and examines the recent announcement from the Portability Services Network (PSN) that it has signed up 15,000 plan sponsors representing 5 million participants after only 1 year. Barstein states that the announcement represents a "milestone as recordkeepers have finally come together to create a data protocol which could lead to further cooperation in sharing data and facilitating retirement income" while noting that PSN is "looking for more recordkeepers to join."

Auto Portability: A Potential Game-Changer for Retirement Savings in America

401kTV.com's Fred Barstein takes stock of the recent announcement by the Portability Services Network (PSN) that it has signed up 15,000 plans representing 5 million participants for the auto portability plan feature. Barstein characterizes auto portability as "a powerful innovation....that has the potential to preserve retirement savings for millions of American workers, particularly those from minority communities." Barstein closes his analysis by noting that "auto portability is an opportunity to make meaningful, long-term financial impact for employees across diverse backgrounds and dramatically minimize leakage from the nation’s retirement plans."

Talking Points: The Path of Less Resistance

Nevin Adams, writing in NAPA Net, discusses the 12/3 announcement by the Portability Services Network (PSN) that, in its first year of operation, has seen auto portability adopted by over 15,000 plans with 5 million active participants. Adams characterizes the announcement as "a big deal" -- where auto portability could deliver $1.6 trillion in benefits over 40 years, including $744 billion for minorities, while praising RCH, "whose long-term patience and commitment made the concept of auto-portability a reality."

401(k)-Created Millionaires Surge to New High

NAPA Net's Ted Godbout reports on the release of Fidelity Investment's Q3 2024 Retirement Analysis, where the firm offers key insights into the retirement sector. With a strong focus on average savings balances and rates, the study also prominently features Fidelity's year 1 results for the adoption of auto portability, where they've already signed up approximately 6,000 plans representing 2.2 million participants for the new feature.

Also featured in ASPPA Net

Fidelity Highlights Auto-Portability as Way to Combat Cash-Outs in Q3 Report

PLANSPONSOR's Natalie Lin reports on the release of Fidelity Investments' Q3 2024 Retirement Analysis, where the firm summarized key developments in the retirement sector. In the report, Fidelity announces that, as of October 2024, it has signed up over 6,000 plans for auto portability, representing 2.2 million participants. Fidelity's disclosure complements an announcement earlier in the week by the Portability Services Network. Lin quotes Fidelity's Sterling Ingui as stating: “plan sponsors are increasingly beginning to understand the benefits of auto-portability, including increased participant satisfaction, the ability to attract and retain workers, and an expansion of their auto services suite—all at no additional cost to the plan sponsor.”

Also featured in PlanAdviser

Dressing Up Traditional Automatic Rollovers

Writing in 401k Specialist, RCH’s Tom Hawkins describes learning about the existence of so-called “world-class” automatic rollover IRA services which lay claim to unspecified, premium features. In his article, Hawkins characterizes them as “old-school, traditional automatic rollover IRAs” which place participants in high-fee, safe harbor IRA “landfills” where their small balances languish. What’s needed, writes Hawkins, is “not faux fancy features – it’s a low-fee, transitional safe harbor IRA that preserves small-balance retirement savings for only as long as they can be consolidated into a current-employer’s plan or into another IRA.”