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Retirement Clearinghouse in the News
Find news articles referencing RCH and our services, including RCH Auto Portability
Leakproof Your Plan
Writing in the April-May edition of PLANSPONSOR magazine, Karen Wittwer and Noah Zuss collaborate to examine steps that plan sponsors can take to "leakproof" their retirement plans and to safeguard their participants' retirement savings from unnecessary leakage. Wittwer and Zuss turn to several industry sources, including RCH's EVP & Chief Revenue Officer Neal Ringquist and Tom Hawkins, SVP, Marketing & Research. In his remarks, Ringquist emphasizes the importance of addressing cashout leakage as the top priority, and striking a balance when it comes to restricting in-service withdrawals, while Hawkins cites the importance of providing education and assistance to new hires as well as to newly-separated participants.
5 New Automatic Rollover Criteria for 401k Plan Sponsors
In his latest piece in 401k Specialist, RCH's Tom Hawkins writes that the criteria for selecting an automatic rollover IRA provider have fundamentally changed. In the past, most 401(k) plan sponsors simply accepted the solution offered through their recordkeeper or TPA. While others performed due diligence, they applied a limited set of criteria including basic fees, investment options and accountholder service. Few considered the grim realities facing terminated participants forced out into safe harbor IRAs, including excessive cashouts, forgotten accounts, hidden fees, and barriers to exit. Now, writes Hawkins, it's incumbent upon plan sponsors to fundamentally “re-think” these programs, incorporating 5 new criteria to ensure that their automatic rollover IRA programs are fiduciary-friendly, while dramatically improving participants’ retirement outcomes.
Press the magic (benefits) button
Writing in BenefitsPRO, Omaha-based benefits consultant Marty Traynor examines the status of technology in today's HR benefits world, and identifies serious shortcomings, writing that "neither employers nor employees think the process supporting employee benefits is as easy to work with as it should be." Building a list of 8 technology-based processes that could bridge the gap, Traynor includes auto portability in the list, envisioning the day "[w]hen an employee changes jobs or retires—auto portability processes...support continuing portable coverages."
401k Portability in Four Movements: Case Study
Writing in 401k Specialist, RCH's Tom Hawkins examines the experience of a very large (250,000+ participants) 401(k) plan sponsor that has been highly successful in delivering improved participant outcomes by incrementally adopting a full program of retirement savings portability. Looking at four distinct five-year periods that coincided with increasing levels of portability and improved participant outcomes, Hawkins writes that "there’s no finer example of those [improved] outcomes than the multi-year, real-world experience of this plan sponsor, where thousands of participants increased their prospects for a timely and comfortable retirement."
How Technology Is Transforming Retirement Preparation
Entrepreneur's April Miller examines how technology is transforming retirement, and notes how auto portability can serve to reduce participant cashouts. Miller writes that "[p]eople are increasingly advocating for auto-portability features built into employers’ retirement plans. In short, they would automatically transfer savings to new, active savings accounts in cases where the funds are subject to mandatory distributions."
401(k) Auto Portability Can Improve Outcomes
Writing in 401kTV.com, Managing Editor Steff Chalk examines the dual impact that auto portability has on improving participant outcomes, while reducing fiduciary risk for plan sponsors. Chalk notes that auto portability helps address the problem of automatic cash-outs, which can create large volumes of uncashed checks -- resulting in poor outcomes and heightened fiduciary risks. "401(k) auto portability comes to the aid of plan sponsors" writes Chalk, adding: "401(k) auto portability has the potential to help mitigate sponsors’ fiduciary risk and reunite more participants with their hard-earned savings."
How to Address the Achilles’ Heel of State Auto-IRA Programs
RCH's Tom Hawkins, writing in 401k Specialist, offers his view that state-sponsored auto-IRA programs, despite their potential size and strength, suffer from an obvious weakness, or "Achilles’ heel": a lack of retirement savings portability. Hawkins writes: "Without addressing their portability problem, auto-IRA programs could expand, but may never reach their full potential, housing large numbers of churning, small-balance accounts. However, with adequate support for portability both into and out of these programs, they could dramatically increase the odds that they deliver on their promise of building incremental retirement wealth for millions of Americans."
Targeting small, uncashed 401(k) distribution checks can generate big savings
Writing in Employee Benefit News, RCH President & CEO Spencer Williams examines the ongoing problem of uncashed 401(k) distribution checks. Worker mobility, as well as the prevalence of automatic cash-outs for balances under $1,000, conspire to create an administrative burden as well as a significant fiduciary risk for plan sponsors. Auto portability, writes Williams, can “mitigate this exposure, and help participants increase retirement savings by significantly reducing the need for automatic cash-outs” -- an outcome that Williams describes as “a win-win.”