News

The Big Shift Towards Auto Portability

RCH's Tom Hawkins, writing in 401k Specialist, asks readers if they've noticed the recent "big shift" towards auto portability. Hawkins writes: "[f]or those accustomed to a glacial pace of change in the world of retirement, you could be forgiven if you’ve missed two very recent, tectonic shifts toward the system-wide adoption of auto portability" that occurred in rapid succession in the fourth quarter of 2022. The formation of the Portability Services Network (PSN) in October, quickly followed by SECURE 2.0 legislation that included important auto portability provisions, were both "unprecedented actions" which Hawkins asserts will continue to reverberate in the retirement industry. "The 'big shift'", Hawkins concludes, "won't be completed overnight, but it's already well underway, and will proceed with a pace that could take many more by surprise."

Previously featured in RCH's Consolidation Corner blog

Next Major Industry Focus: Using Auto-Portability to Solve Savings Gap

Writing in NAPA Net, John Sullivan opines that, with the advent of SECURE 2.0, "preventing retirement plan “leakage” through the widespread adoption of auto-portability appears to be the next industry target now that SECURE 2.0 has passed." Sullivan expands on that legislative theme by addressing the October 2022 formation of the Portability Services Network (PSN), and turning to RCH & PSN CEO Spencer Williams, who provides an overview of PSN activities. Williams also references the "massive overlay" of auto portability's benefits for minorities, women and lower income demographics, which coincides with the goals of PSN chairman Robert L. Johnson, as well as PSN's founding recordkeepers.

RCH's Spencer Williams Among The Retirement Industry's Most Influential in 2022

Spencer Williams, RCH and Portability Services Network (PSN) president & CEO, was ranked among the most influential people in the retirement industry, based on an annual poll conducted by The 401kWire. With over 100 industry influencers to choose from, Williams was ranked #13 by readers. To mark the achievement, 401kWire editor Sean Hanna chronicled Williams' remarkable year, which is the culmination of over a "decade and a half" of advancing portability, a "wave that he finally gets to ride to shore." Hanna notes Williams' key achievements in 2022, which include the launch of the Portability Services Network, as well as passage of SECURE 2.0, which incorporated important provisions for auto portability.

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Efforts to keep workers from cashing out their 401(k)s gain steam

Kerry Hannon, Senior Columnist for Yahoo! Money examines the importance of new SECURE 2.0 provisions that codify auto portability and links the new law to recent industry-driven efforts in curbing excessive cashout leakage. The legislation, writes Hannon, is "building on a similar effort launched last year by the private sector" -- referring to the October 2022 announcement of the Portability Services Network (PSN). In the piece, Hannon turns to RCH EVP Neal Ringquist, who states that the legislation will have "a major, positive impact on the consortium and auto portability" and "should increase the number of auto portability transactions by 20% when the new law takes effect." Also quoted are Kevin Barry, president of Fidelity’s workplace investing division, and Robert L. Johnson, founder and chairman of Retirement Clearinghouse (RCH) and chairman of PSN.

As job switchers chase higher wages, they may be leaving money behind. Here's what to know

Writing in USA Today and syndicated in other media affiliates, Medora Lee examines the issue of "leaving money behind" in employer-sponsored retirement savings plans. Lee focuses on the potential solutions resulting from SECURE 2.0 legislation, including the creation of a national lost & found registry, as well as the codification of auto portability. Lee turns to Alight Solutions' Greg Long and Vanguard's David Stinnett, both representing firms who joined forces with Fidelity and Retirement Clearinghouse (RCH) to form the Portability Services Network (PSN), created to accelerate the adoption of auto portability. Lee closes her piece by describing how auto portability works.

Also featured in Yahoo! Money

What the Secure 2.0 Act will mean for early 401(k) cashouts

In an interview featured on Yahoo! Finance, Kerry Hannon is interviewed by Dave Briggs and Seana Smith, providing her take on how elements of the recently passed SECURE 2.0 legislation will help serve to minimize 401(k) cashouts. Hannon first addresses the problem of 401(k) cashouts, uses an illustration generated using Retirement Clearinghouse's Cashout Calculator. Hannon goes on to describe elements of auto portability that have been incorporated into SECURE 2.0, noting that "the new law really jumpstarts this, which will help people hang on to that money, keep it invested in their retirement plans."

Robert L. Johnson Lauds Congress for Including Auto Portability in SECURE 2.0 Act

In a 12/28/22 press release, Robert L. Johnson, founder of The RLJ Companies and Chairman of Portability Services Network (PSN) and Retirement Clearinghouse (RCH), lauded Congress and others for their role in the passage of SECURE 2.0 legislation, which included provisions for auto portability. "I am pleased that this Congress codified auto portability and thereby recognized the value and importance this plan feature delivers to address the retirement security needs of so many underserved Americans," said Johnson. "I am particularly grateful to Senators Tim Scott (R-SC) and Sherrod Brown (D-OH) for their support in advancing auto portability through this Congress. I also want to thank Marc Morial, President & CEO of the National Urban League and Derrick Johnson, President & CEO of the NAACP for their leadership and being early, vocal supporters of auto portability."

Roadmaps to Retirement: Taking Stock and Looking Forward

Writing in TheStreet.com, Ariana Ottrando reports on a retirement security roundtable hosted by The Harkin Institute and the U.S. Department of Labor. In session two, which featured the DOL's Kathleen Kennedy Townsend and Groom Law Group's Michael Kreps, the discussion turned to the lack of portability in America's defined contribution system. Both Kennedy Townsend and Kreps addressed this issue, with Kreps citing the recent advent of the Portability Services Network, where "three of the largest service providers in the country" in conjunction with Retirement Clearinghouse (RCH), embraced auto portability.