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Retirement Clearinghouse in the News
Find news articles referencing RCH and our services, including RCH Auto Portability
Writing for 401kSpecialist Magazine, RCH EVP Neal Ringquist coaches plan sponsors on a winning strategy to address the problem of missing participants. Ringquist offers sponsors a four-part playbook for success, including: 1) understanding the problem, 2) taking proactive measures, 3) adopting best search practices and 4) engaging a search service provider. With participants’ benefits on the line, sponsors who follow the Ringquist playbook for conducting diligent missing participant searches will be playing to win.
A 10/31/19 EBRI Issue Brief -- What if OregonSaves Went National: A Look at the Impact on Retirement Income Adequacy -- examines the impact of a nationwide roll-out of a hypothetical "national" OregonSaves plan, as well as the nationwide adoption of 401(k) safe harbor plans by employers not currently offering a DB or DC plan. Not surprisingly, EBRI finds that the increased access to workplace retirement savings plans generated by these programs produces substantial reductions in EBRI's all-important metric, the Retirement Savings Shortfall (RSS). However, when each program is further paired with auto portability, their benefits are dramatically increased -- from $459 billion to $759 billion for OregonSaves, and from $645 billion to $1.0 trillion for 401(k) safe harbor plans.
The Savings Preservation Working Group (SPWG), a DC-based coalition seeking to promote best practice retirement policies, announced the release of its first Issue Brief. Entitled "Cashing Out: The Systemic Impact of Withdrawing Savings Before Retirement" -- the report examines a range of recent research and data to quantify the vast scope of leakage from the defined contribution retirement system, and "represents the most complete review of retirement leakage data to date." Critically, the SPWG analysis determines that cashout leakage amounts to between $60 billion and $105 billion annually, impacting 4.5 to 6.4 million participants. The group's website is located at PreservingSavings.org.
In his 10/28/19 article in Pensions & Investments, reporter Brian Croce examines the "critical turn toward acceptance" that the Retirement Clearinghouse (RCH) auto portability program has made, following the "green light" the program received from the U.S. Department of Labor. In the piece, Groom Law Group's Michael Kreps characterizes the DOL's actions as the "starting gun", while RCH's Spencer Williams and Neal Ringquist provide important updates on progress-to-date with 401(k) recordkeepers. Tim Rouse, executive director of SPARK, an industry group representing recordkeepers, voices his support for auto portability, while ERIC's Aliya Robinson states that "once [auto portability] hits critical mass I think it's something we'll see pretty widely across the retirement system."
On 10/11/19, NAPA Net released results of a reader survey addressing the problem of cashout leakage and yielding valuable perspectives on retirement savings portability. Regarding plan-to-plan portability, a theme “echoed repeatedly” was the “complex, manual process that requires significant form completion and coordination.” The poll further found that 82% of respondents had plan sponsor clients who would be interested in a program that automatically consolidated balances. Specifically referencing auto portability, 81% of respondents indicated that they would introduce such a program to a plan, with 75% opining that such a program would make it easier for participants to manage their retirement savings.
In an article appearing in legal intelligence site JDSupra.com, Ballard Spahr LLP's Edward Wegerson examines the impact of the DOL's recent actions towards the RCH Auto Portability program. Wegerson provides some historical background by noting prior, related regulatory initiatives over the last several years, and concludes by stating that "for many employers and participants in high turnover industries, [auto portability] will serve to preserve retirement accounts that will provide more participants with a more secure retirement with minimal effort."
In the fifth installment of his five-part series on 401(k) cashout leakage in 401k Specialist, RCH's Tom Hawkins addresses auto portability, a solution that not only makes sound business sense, but delivers a positive societal impact for the corporations adopting it. Citing the recent "Statement on the Purpose of a Corporation" from members of the Business Roundtable, Hawkins believes that as these socially-conscious corporations examine auto portability, they’ll quickly become convinced that auto portability is both a sound business decision, as well as the right thing to do.
ThinkAdvisor's Michael S. Fischer examines the latest Employee Benefit Research Institute (EBRI) research on auto portability, and finds a lot to like. First addressing the magnitude of the 401(k) cashout leakage problem, Fischer notes EBRI's finding that $92.4 billion leaked in 2015, and that each year, 4 in 10 plan participants who leave their jobs will cash out 15% of plan assets. Fischer goes on to highlight auto portability's effectiveness in plugging cashout leakage, accounting for $1.5 trillion in benefits as a standalone policy initiative. Fischer further cites auto portability's benefits to specific demographic segments, and concludes by noting its incremental, beneficial effects when combined with other legislative initiatives that expand access to workplace retirement plans.