News

How 401k Consultants Miss the Automatic Rollover Mark

401(k) plan consultants have been forceful advocates for the adoption of best practices at leading retirement plan sponsors. However, when it comes to automatic rollover programs, plan consultants sometimes miss the mark, at least in terms of participant outcomes. RCH's Tom Hawkins, writing in 401k Specialist, makes the case that 401(k) plan consultants should extend their analysis to emphasize those automatic rollover program components that help participants improve their retirement outcomes by avoiding cashouts, moving their retirement savings forward, and keeping their stay in safe harbor IRAs as brief as possible.

Previously featured in the RCH Consolidation Corner Blog

Also featured in The Wealth Advisor

401k Plans: An Ongoing Public-Private Partnership That Works

In observance of National 401(k) Day on Friday, September 9th, RCH's Tom Hawkins takes the opportunity to reflect on the long-running, highly successful public-private collaboration that has fostered the rapid ascendance of America’s 401(k) system. Writing in 401k Specialist Magazine, Hawkins states that "this partnership will continue to drive innovations that will expand and improve the 401k system for millions of Americans – not only helping them to save more but preserving more of their savings for retirement."

How proposed legislation can help resolve retirement-savings gaps

Writing in Employee Benefit News, RCH founder, president & CEO Spencer Williams delves into recently-proposed legislation in the U.S. Senate, making the case that its auto portability-related provisions will make a real difference in the retirement security of millions of hardworking Americans. Citing Vanguard's recently-released How America Saves report, Williams notes that the highly-respected annual report "underscored that premature cash-outs of small 401(k) balances continue to threaten retirement readiness for plan participants, especially those who are younger and have less savings." Williams quotes the Vanguard research as concluding that "[a]uto portability services and revisions to minimum balance rules can help decrease cash out rates." Williams goes on to praise the Senate's bipartisan approach to the bill, adding: "[i}f the legislation is signed into law, the retirement-savings gaps in our society can begin to be filled."

3 Ways 401k Plan Sponsors Can Boost Participant Awareness

Writing in 401k Specialist, RCH's Tom Hawkins draws attention to National Financial Awareness Day, which falls on August 14th. In his piece, Hawkins offers plan sponsors 3 steps they can take to increase financial awareness. Plan sponsors who follow these steps, asserts Hawkins, "won’t simply produce more awareness in the minds of their participants, they’ll generate quantifiable results, coming in the form of decreased cashouts, higher levels of consolidation and average plan balances, as well as a lower incidence of missing participants."

Financial Advice College Girls Need to Follow Post Graduation

The women-focused website AllWomensTalk.com turns to experts for "amazing financial advice" that women should follow after graduating from college. RCH President & CEO Spencer Williams' advice is featured in 2 of the 7 steps the article suggests that their audience follow. Williams first advises women grads to "set aside 5% to 10% of your pay" for emergency expenses, and achieving that, to “take that same 5% to 10% of your pay that you were diverting to your emergency fund and redirect it to your 401(k)."

401(k) Fees Lower than IRA Alternative

Steff Chalk, 401kTV's Managing Editor, informs readers about new Pew Charitable Trust research that finds 401(k) fees can be lower than IRA fees, often by a wide margin. Chalk links the research findings to auto portability, noting that policymakers could act by "furthering auto portability as a way to transfer assets between retirement plans."

Why Missing 401k Participants Are So Misunderstood

Writing in 401k Specialist, RCH's Tom Hawkins examines the topic of missing participants, which he states: "is a problem that’s ill-defined and poorly understood, and where fundamental misunderstandings exist, inadequate solutions – paired with the prospect of unwanted regulatory attention or audits – can follow." Hawkins asserts that "taking proactive steps to conduct searches, and turning on plan features that promote retirement savings portability are the key steps required to getting off the missing participant treadmill."

Automatic-Retirement-Plan Options—Status and Outlook

Ed McCarthy, writing in Wealth Management, takes a look at the present state and future outlook for 'automatic' retirement plan options, and devotes attention to auto portability. McCarthy turns to Edward Gottfried, director of product at Betterment at Work, who characterizes auto-portability as a good idea. Gottfried is quoted in the article as stating: “I think [auto portability]'s definitely an area to watch in terms of new kinds of automatic provisions that might help streamline this industry, but also keep American savers in control of their retirement savings in a tighter way than they do right now.”