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Retirement Clearinghouse in the News
Find news articles referencing RCH and our services, including RCH Auto Portability
Ask the Expert – SECURE 2.0 Act: Auto Portability
In the March-April edition of the Employee Benefit Plan Review, Katrina Berishaj and Megan Stamm collaborate to perform an extensive legal analysis of the provisions for auto portability included in the recent SECURE 2.0 Act. Their analysis dives deep into the detail of those provisions, including the primary processes and fiduciary responsibilities that are encompassed by the legislation.
Video: Alight's Greg Long Addresses Auto Portability at DCIIA Forum
Taking part in a SECURE 2.0 panel at the 3/8/23 DCIIA Innovation Forum, Alight Solutions' Greg Long took the opportunity to inform and educate attendees about auto portability and the new Portability Services Network. Long offered a primer on auto portability -- how it addresses long-standing portability and cashout leakage issues within America's defined contribution system -- and how the formation of the new Portability Services Network will rapidly advance the availability and adoption of the new feature. Long's comments begin at the 21:25 mark.
Warning! The Federal Government Could be Coming for Your 401(k)
The editors of NAPA Net examine a Senate bill proposed by Sens. Hickenlooper and Tillis (Retirement Savings for Americans Act) that they contend would effectively establish a federally-sponsored multi-employer (MEP) plan that would compete with private plans. The article cites auto portability as one of several initiatives in the private sector that shows responsiveness to the needs of the under-saved, and obviating the need for such over-reaching federal legislation.
How to Help DC Participants Find and Consolidate Accounts
Writing in WealthManagement.com, Fred Barstein examines a new entrant into the account consolidation derby who purports to locate and consolidate 401(k) retirement savings accounts. Barstein also mentions Retirement Clearinghouse (RCH) and the Portability Services Network (PSN), noting: "Some entrepreneurial companies are not waiting. The Retirement Clearinghouse created the Portability Services Network, which currently includes Fidelity, Vanguard, Empower and Alight with others likely to join, enabling smaller accounts to move from one provider to another rather than getting cashed out, leading to significant leakage."
Set It and Actually Forget It
The New York Times' Charlotte Cowles examines the problem facing millions of Americans who'll change jobs, leaving behind retirement savings at their former employer, or worse -- cashing out their savings altogether. Cowles turns to Vanguard's Steve Holman, who characterizes auto portability as the easiest, default solution, stating: “[a] participant doesn’t even have to do anything. You go to a new job, open a new plan, and the Portability Services Network will automatically find your old account and transition those assets in short order.” Holman also expresses confidence that "over time, we’ll have broad adoption across the industry" of auto portability.
A Renaissance for Auto Enrollment
Writing in 401k Specialist, Tom Hawkins examines the past, present and potential future of automatic enrollment, the popular 401(k) plan feature that has made great strides since 2007, but has faced headwinds in achieving adoption in high-turnover enterprises. Now, thanks to a SECURE 2.0 mandate for new plans, along with the retirement industry's embrace of auto portability, auto enrollment may soon undergo a "renaissance" and enter its final phase of growth, delivering disproportionate benefits to under-saved and under-served workers, including minorities, women and those with lower incomes.
Too Many Employees Cash Out Their 401(k)s When Leaving a Job
Writing in the Harvard Business Review, a research team comprised of academics John G. Lynch, Yanwen Wang, and Muxin Zhai described their findings on the problem of 401(k) cashout leakage. The study (Cashing Out Retirement Savings at Job Separation) lines up with previous research, determining that 41.4% of participants prematurely cashed out their retirement savings after exiting a job, paying taxes and penalties. The team also observed that, following a job change, former employees face bureaucratic and psychological challenges, receiving form letters that effectively "turn psychologically illiquid retirement savings into a source of ready cash." Finally, the team commended the "new auto portability initiative by Retirement Clearinghouse" for plan sponsors "served by major financial services firms like Vanguard, Alight, and Fidelity."
Also featured in the Society for Human Resource Management (SHRM)
A no-brainer retirement benefit advisers can bring to their clients
Writing in Employee Benefit News, Spencer Williams, CEO of Portability Services Network (PSN) and Retirement Clearinghouse (RCH), makes a compelling case for plan advisers to help facilitate the roll-out of auto portability to the plan sponsors and participants they serve. Williams cites two recent headline-grabbing events -- the passage of SECURE 2.0, which incorporates provisions for auto portability, and the October 2022 formation of PSN to function as an industry utility for transferring balances from plan-to-plan. As both participants and plan sponsors stand to realize tremendous benefits from the adoption of auto portability, it "presents an easy opportunity for financial advisors" who will be "able to demonstrate value for their clients – and, in the process, grow their practices."