News

Portability Services Network Launches Solution to Reduce Plan Leakage

401k Specialist's Amanda Umpierrez reports on the 11/7/23 announcement from the Portability Services Network (PSN), signaling that the network's auto portability solution is operational and that member recordkeepers will commence rolling out the service to their plan sponsor clients. Umpierrez quotes Retirement Clearinghouse (RCH) and PSN Chairman Robert L. Johnson, who states: "[t]he Portability Services Network is poised to deliver on its core mission to stem the cash-out crisis that harms Black and other under-served and under-saved low-wage workers" including preserving $619 billion in retirement savings for low-wage Black workers and minority communities over the next generation. Johnson also notes the "great interest" expressed thus far by employer plan sponsors.

LTPT and Auto-Portability Regs Coming Soon, Officials Reiterate

Writing in ASPPA Net, John Iekel covers the Nov. 6 session of the Society for SPARK Forum, where officials from the IRS and the DOL weighed in on their near-term regulatory agenda. In a panel that included DOL Principal Deputy Assistant Secretary Ali Khawar, the topic of auto portability was addressed. Iekel quotes Khawar as stating that auto portability is “an important part of the puzzle” and that "and that the DOL will be issuing guidance that will provide more clarity on what the statutory text says." Iekel adds that "Khawar’s comments were similar to those articulated Oct. 24 at the ASPPA Annual Conference...by Assistant Secretary of Labor Lisa Gomez."

Retirement's perfect storm is brewing. How automated portability can offer shelter

RCH and PSN President & CEO Spencer Williams, writing in Employee Benefit News, notes that a rising incidence of hardship withdrawals and 401(k) loans – as reported by Bank of America – combined with a pending increase in the account-balance limit for automatic rollovers effective 12/31/23, could create a “perfect storm” for depleting Americans’ retirement savings. “Fortunately,” writes Williams, “sponsors and recordkeepers have access to a solution that can help them clean up their plans without automatically rolling terminated accounts into safe-harbor IRAs.” Auto portability, continues Williams, is a “capability [that] is more essential than ever, with 401(k) plan enrollment continuing to increase” and could serve to defuse the brewing storm of potential cash-outs.

Previously featured in RCH's Consolidation Corner

Portability Services Network Goes Live

PlanAdviser's Alex Ortolani covers the 11/7/23 announcement from the Portability Services Network (PSN), writing that the network "is live, as of Wednesday, enabling digital automatic portability of retirement accounts from the country’s six largest recordkeepers." Ortolani notes that three of the six PSN recordkeeper owner members have completed integration of auto portability via the PSN network, and have begun offering the service to their plan sponsor clients. Ortolani goes on to quote Retirement Clearinghouse (RCH) and PSN Chairman Robert L. Johnson, as well as Fidelity's Dave Gray, head of workplace retirement offerings and platforms, on the importance of the development, announced in a PSN press release, which included a joint video announcement from members of the consortium.

Also featured in PLANSPONSOR

Portability Services Network ‘Open for Business’

NAPA Net's Ted Godbout reports on the 11/7/23 announcement by the Portability Services Network (PSN) that it has "officially launched" and has become "operational 12 months after being announced in 2022." Godbout quotes Retirement Clearinghouse (RCH) and PSN Chairman Robert L. Johnson in the piece, who affirms the mission of PSN to help America's under-served and under-saved workers via the widespread adoption of auto portability. In a video announcement, Johnson and other PSN board members express their support for PSN and invite all recordkeepers to join the industry-led consortium.

Destination: Retirement Income

In the fourth quarter edition of their quarterly Defined Contribution Quarterly feature, Goldman Sachs Asset Management (GSAM) highlights key developments in the defined contribution industry. Leading off their list is the Portability Services Network (PSN), the industry-led consortium dedicated to the adoption of auto portability. GSAM notes PSN's "go-live" date of 10/1/23 and identifies the 6 owner member recordkeepers already on board.

RPA Conversations: Fidelity's Dave Gray

In his ongoing Wealth Management RPA Conversations series, Fred Barstein, contributing editor and CEO of 401kTV, talks with Dave Gray, head of workplace retirement products and platforms at Fidelity Investments. Gray weighs in on several key retirement industry topics that affect retirement plan advisers, and turns to the Portability Services Network (PSN), an industry-led consortium dedicated to the widespread adoption of auto portability. Gray walks Barstein through the background of PSN, addresses the PSN's goal of bringing on board additional PSN recordkeeper members, and stresses the importance of enlisting retirement plan advisers in helping to facilitate the adoption of auto portability.

Link to discussion on Portability Services Network, beginning at 7:00 mark

No One is Coming to Save You From Missing Participants

Writing in 401k Specialist, Tom Hawkins provides his views on the dilemma facing plan sponsors who must confront the problem of locating missing plan participants. Despite ongoing efforts petitioning regulatory authorities for clear, bright line guidance, plan sponsors "must take decisive action to avoid being overwhelmed, including implementing effective, common-sense search practices, and pairing those search practices with other actions that will minimize the incidence of missing participants over time." Hawkins also urges plan sponsors to consider embracing retirement savings portability, including auto portability, to assist separated participants in consolidating their retirement savings following a job change.

Previously featured in RCH's Consolidation Corner