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Retirement Clearinghouse in the News
Find news articles referencing RCH and our services, including RCH Auto Portability
Writing in 401k Specialist, RCH’s Tom Hawkins reacts to the DOL’s 2/14/22 Request for Information (RFI) seeking comment on ways to “protect life savings and pensions from threats of climate-related financial risk.” Hawkins contends that our retirement system itself has significant sustainability problems that are more financially material to future retirees than climate change. Hawkins urges action to address the 401(k) system’s inefficiency and waste, which could “produce more of the ‘green’ that will matter to future retirees.” Hawkins notes the findings of a recent Brookings Institution report on the problem of small retirement accounts, which recommends improvements in “combining accounts” and includes support for auto portability.
Writing in the Pension Research Council's (Wharton School, Univ. of Pennsylvania) RetireSecure Blog, Michael Kreps of the Groom Law Group offers his considered view on auto portability, which Kreps believes "is likely to have an enormous impact on the US retirement system" by reducing cashout leakage and consolidating retirement savings. In the piece, Kreps cites a variety of industry statistics and projections, concluding that auto portability "will undoubtedly preserve many small accounts, making retirement more secure for millions of people."
NAPA Net's Ted Godbout reviews the latest research report from Alight Solutions, entitled "Improving Retirement Readiness for Underrepresented Groups." Reporting on Alight's findings, Godbout highlights the six steps that Alight offers plan sponsors to increase retirement savings for historically under-represented groups. As one of those steps, Alight advises sponsors that "implementing auto-portability can help reduce the number of automatic cash-outs that occur when people change employers" and that auto portability's impact is "most profound for marginalized groups."
Writing in Yahoo! Money, journalist Kerry Hannon takes stock of the problem facing millions of Americans, whose old employer-sponsored retirement accounts may have been left behind following a job change. Hannon reports that private businesses, such as Retirement Clearinghouse have "jumped in to solve the problem" by providing auto portability, which "automatically moves a departing employee’s 401(k) savings funds from the previous employer’s plan to their new employer’s plan, even if their assets are less than $5,000." Hannon also notes that "Vanguard, the mega mutual fund firm, plans to launch the Retirement Clearinghouse’s auto portability program for 401(k) sponsor clients and their participants in mid-2022.
Alight Solutions has released a new research report, entitled "Improving Retirement Readiness for Underrepresented Groups." The new paper identifies six key actions that plan sponsors can undertake to boost retirement savings for historically under-represented groups. In one of those actions, Alight advises employers that "implementing auto-portability can help reduce the number of automatic cash-outs that occur when people change employers" and that auto portability's impact is "most profound for marginalized groups."
Writing in BenefitsPro, David Baumann recaps a 1/6/2022 report by the Aspen Institute that identified a compelling need for portability, yet "more than 40 years after a presidential commission recommended making retirement programs more portable, policymakers are still struggling with the issue." Baumann notes that the Aspen Institute's paper cited a number of key factors making the case for auto portability, including: 1) the propensity of American workers to change jobs, 2) to cash out following a job change, and 3) an EBRI survey finding that "85% of retirement savers would find automatic transfers between programs valuable." Baumann also noted that "[a]n Aspen survey of retirement experts found that 57% supported a mandate" for auto portability, while 48% of the same experts believed that auto portability was feasible without a mandate.
Writing in Yahoo! Money, Kerry Hannon addresses the retirement savings cashout problem that occurs following a change of jobs. Hannon turns to WISER's President Cindy Hounsell, who in a companion video interview, offers research revealing the magnitude of cashouts and how women, in particular, should think twice before cashing out. Women, as both Hannon and Hounsell explain, face retirement savings headwinds, as they generally have a longer life expectancy, while earning less than their male counterparts, on average. Hannon quotes Hounsell as suggesting that participants “[r]un the Retirement Clearinghouse’s Cash Out Calculator to show you what even a small balance cashed out can cost you” and to get a sense of the opportunity cost for this choice.
Writing in Employee Benefit News, RCH President and CEO Spencer Williams breaks down the phenomenon known as The Great Resignation. Williams makes a compelling case that -- for defined contribution plans -- seamless plan-to-plan portability, including auto portability, are absolutely vital to preserving affected participants' retirement savings, and in ensuring that their retirement savings balances are moved forward when they re-enter the workforce.