News

New Research Shines Light on Saver’s Match Potential

Writing in 401k Specialist Magazine, Tom Hawkins puts two recent Saver’s Match research findings – one from Morningstar and the other from RCH – into perspective. The Morningstar research, authored by industry veteran Jack VanDerhei and Spencer Look, pegs the potential incremental retirement wealth generated by the Saver’s Match at $2.03 trillion. Another research effort, conducted by Retirement Clearinghouse, involves a discrete event simulation model of the Saver’s Match program, simulating specific technologies and operational solutions required to support the program. Together, writes Hawkins, “these two new research efforts…quantify overall Saver’s Match program benefits, and model the potential size, scale and operations of the program.”

Previously featured in the RCH Consolidation Corner Blog

Here's why an alarming number of workers cash out 401(k) plans

Writing in USA Today, journalist Daniel de Vise addresses the 401(k) system's cashout leakage problem, turning to a variety of industry experts, including representatives from Vanguard and Fidelity, who address the magnitude of the problem as well as many of the systemic and behavioral issues that drive cashout decisions. Pivoting off a quote from AARP's David John, de Vise closes his piece by focusing on auto portability, and cites the Portability Services Network consortium, where "most big retirement-plan providers participate in the [auto portability] effort."

Saver’s Match Could Add $2 Trillion in Retirement Wealth: Morningstar

401k Specialist Managing Editor Brian Anderson covers new Saver's Match research from Morningstar, which pegs the long-term incremental wealth benefits of the federal program at $2.03 trillion. The research, documented in an article authored by Morningstar researchers Spencer Look and Jack VanDerhei, "simulated retirement outcomes with and without the program under four behavioral scenarios" and builds on earlier research by the team finding that the SECURE 2.0 program "could potentially act as a solution to the retirement savings gap."

The Federal Program That Could Help Generate $2 Trillion in Retirement Wealth

New Morningstar research indicates that the new Saver's Match program could generate substantial retirement wealth, according to researchers Jack VanDerhei and Spencer Look. Applying the Morningstar Model of U.S. Retirement Outcomes, the research team "found that the Saver’s Match could help boost retirement savings for Americans by $2.03 trillion at retirement age." Morningstar's latest analysis builds upon earlier research which found that specific demographic segments, such as single women, Black Americans, and Hispanic Americans could realize significant benefits.

Lost 401(k)s are costing employees: How employers can help with rollovers

EBN's Lyn Cavanaugh, interviewing Mindy Yu, Director of Investing, Betterment at Work, discuss the topic of "lost 401(k)s" and how employers can assist former employees with moving their retirement savings forward. Addressing the topic of auto portability, Wu states that "employers can take a more proactive role by....partnering with platforms that support...auto-portability...[to] reduce the chance that savings go missing in the first place."

Improving Retention By Supporting 401(k) Account Consolidation

Writing in Wealth Solutions Report, Spencer Williams -- the CEO of both the Portability Services Network and Retirement Clearinghouse (RCH) -- characterizes the "opportunity for advisors" represented by auto portability, which improves the retention of assets in the 401(k) system. Aside from the benefits enjoyed by participants who preserve their savings, auto portability, writes Williams, "creates two-way flows for participants’ savings" and in so doing, allows "more assets to flow into the plans sponsored by advisors’ 401(k) clients through automated roll-in contributions."

Explaining fiduciary obligations for 401(k) consolidation

In his latest opinion piece in Employee Benefit News, RCH Founder, President & CEO Spencer Williams discusses the fiduciary obligations of auto portability, "the process powering 401(k) account consolidation" and seeks to assuage lingering fiduciary concerns associated with "proposed regulations....issued on January 29, 2024 by the U.S. Department of Labor (DOL)." Williams contends that the DOL's regulations do not override fiduciary responsibilities as set forth in the DOL's 2018 Advisory Opinion, or contained in "the regulatory framework for automated portability transactions already in the SECURE Act 2.0."

Hoosiers might have thousands of dollars in unclaimed 401(k) accounts. How you can easily check

Daniel de Vise, writing in the IndyStar, examines the phenomenon of "missing money" in the nation's retirement system. The author examines multiple approaches for finding forgotten retirement savings account, including dedicated websites, the newly-established Retirement Savings Lost & Found, and personal sleuthing. Perhaps saving the best for last, de Vise turns to auto portability, writing: "[f]ewer 401(k)s will go missing in future, experts say, thanks to the evolving concept of "auto-portability" in retirement plans" embraced by the Portability Services Network (PSN). de Vise wraps up his piece by quoting AARP's David John, who states that PSN will make sure that retirement funds “move seamlessly from one job to another."