ABGI & Retirement Clearinghouse Team Up to Provide Managed Portability Solutions

CHARLOTTE, N.C.—January 5, 2016—Alliance Benefit Group of Illinois (ABGI), a record-keeper and third-party administrator for employer-sponsored retirement plans, is teaming up with Retirement Clearinghouse, LLC to deliver cutting-edge managed portability solutions for participants in the plans it services.

As part of this strategic relationship, ABGI will continue to provide front-office portability resources to participants, making them aware of the benefits of consolidating their retirement savings in their current employers’ plans. When a participant elects to take advantage of managed portability solutions to do so, Retirement Clearinghouse will step in to provide assistance with locating, transporting and consolidating their retirement savings accounts. ABGI is making Retirement Clearinghouse’s managed portability services available at no cost to participants. More information about Retirement Clearinghouse’s suite of portability solutions is available online at https://www.rch1.com/institutions-plan-sponsors.

“Once we identify a participant who is interested in this offering, Retirement Clearinghouse will work directly with them to seamlessly move retirement assets from an inactive plan, IRA, or both to their current plan under ABGI—benefiting participants, our plan clients, and the retirement system as a whole,” said John D. Blossom Jr., President and CEO of Alliance Benefit Group of Illinois. “We hope participants in the plans we administer will take advantage of this opportunity to receive much-needed assistance with consolidating what they’ve saved during their working lives—which can potentially increase their income in retirement and is available at no cost to them.”

Despite the difficulty of the consolidation process, 83% of Millennials, 83% of Generation-Xers and 78% of Baby Boomers would roll accounts into their current plans using a service provided, and paid for, by employers. These findings were included in a recent research study (http://info.rch1.com/mobileworkforce) authored by Warren Cormier, CEO of Boston Research Technologies, and show that ABGI’s partnership with Retirement Clearinghouse has come at an ideal time. Other conditions within the U.S. retirement system also demonstrate the urgency of ABGI’s initiative:

  • The nation’s retirement system loses $74 billion in assets every year, and 89% of this “leakage” is the result of cash-outs, according to the U.S. Government Accountability Office. However, the Employee Benefit Research Institute (EBRI) estimates that cutting overall leakage by 50% would add $1.3 trillion in assets to Americans’ total retirement savings over the course of a decade.
  • In addition, auto enrollment has caused a surge in the number of small accounts in retirement plans, leading to higher administrative fees and lower average account balances for sponsors. EBRI found that, in 2012, roughly 40% of retirement plan accounts had balances that were below $10,000.

“Alliance Benefit Group of Illinois is providing a valuable service to its plans and participants by offering access to portability solutions that can help participants take their savings with them when they change jobs,” said Spencer Williams, President and CEO of Retirement Clearinghouse. “Consolidating retirement savings accounts is a cumbersome and time-consuming process, and participants who don’t receive guidance tend to cash out or leave their balances behind. These decisions can deplete participants’ savings over time, so Alliance Benefit Group’s forward-thinking initiative is vital for helping Americans save more for retirement—and creates a competitive advantage for the firm.”

Retirement Clearinghouse is the only independent portability solutions provider that consolidates retirement assets into active 401(k) accounts. The firm has consolidated retirement savings accounts totaling more than $3.17 billion in assets as of November 30, 2015. Consolidation specialists in Retirement Clearinghouse’s call center work directly with plan participants, sponsors and record-keepers to track down participants’ accounts in previous employers’ plans, and move all balances into their current plans.

Peoria, Ill.-based ABGI provides recordkeeping, administration and investment consulting services for employer-sponsored retirement plans in 40 states, with the heaviest concentrations in Illinois, Indiana, Iowa, Missouri and Wisconsin. The firm specializes in designing and servicing participant-directed 401(k), 403(b)(7), 457(b) and other qualified retirement plans. ABGI also acts as administrator for non-qualified retirement plans, interfaced payroll services and Health Savings Accounts.