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Retirement Clearinghouse in the News
Find news articles referencing RCH and our services, including RCH Auto Portability
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.
Writing in 401k Specialist, RCH’s Tom Hawkins opines on the release of the ERISA Advisory Council’s latest report – “Gaps in Retirement Savings Based on Race, Ethnicity and Gender.” In that report, Cindy Hounsell, President of WISER, observed that auto portability's benefits would primarily accrue to those with lower incomes, to minorities, and to women. The EAC's final report also included a recommendation to “study the feasibility of a national portability system” – more commonly referred to as auto portability. Hawkins found the EAC’s recommendation “remarkable given the fact that it emanated from a diverse group of 14 industry experts holding a wide range of opinions on practically any topic.”
NAPA Net's Ted Godbout covers the release of the ERISA Advisory Council's report, entitled "Gaps in Retirement Savings Based on Race, Ethnicity and Gender.” The report makes five key recommendations, including the need to "address fragmentation" within the retirement system. It is within this recommendation that Godbout notes that the report advises taking up the investigation of auto portability, framing it as "studying the feasibility of a national portability system to encourage and facilitate account consolidation and retirement savings preservation for individuals with small account balances in several plans."
PLANSPONSOR's DJ Shaw reports on the growing body of research indicating that auto portability can help close the wealth gap for lower-income workers and minorities. Citing research from Alight Solutions, Shaw walks readers through system-wide leakage statistics and provides an illustration of the high cost of cashing out small balances. Shaw turns to RCH President & CEO Spencer Williams, who provides a primer on RCH's Auto Portability service, followed by RCH EVP of Public Policy, Renée Wilder Guerin, who refers to the minority wealth gap, stating “in today’s world of growing interest in diversity, equity and inclusion, auto-portability is a solution that is measurable—you can measure the impact of someone keeping their retirement account going.”
Auto portability has received a lot of well-deserved attention for its ability to reduce cashout leakage by automatically consolidating small-balance retirement savings, but its effect on preserving participants’ retirement savings is only half of its compelling story. In an opinion piece for 401k Specialist, RCH's Tom Hawkins explores how auto portability can also act as the 'fix' for the related problems of missing participants, uncashed distribution checks and small, forgotten 401(k) accounts.
Ingites' Joe Morris takes a balanced view of the state of the market for "auto-porting" (aka auto portability) small 401(k) balances, and finds that Retirement Clearinghouse stands alone in the retirement industry, in terms of its willingness and ability to forge ahead with an auto portability program. Morris turns to RCH EVP Neal Ringquist, who, along with Jason Roberts of the Pension Resource Institute, describe both the challenges that must be overcome, along with the opportunities that lay ahead. Ringquist sums up the present situation by stating: "“I feel confident that [auto portability] will be a fairly ubiquitous default in the not-too-distant future.”
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