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Retirement Clearinghouse in the News
Find news articles referencing RCH and our services, including RCH Auto Portability
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.
In his latest byline in Employee Benefit News, RCH President & CEO Spencer Williams takes on cash-out leakage -- which remains a big problem for the U.S. retirement system. Citing research that examines auto portability in tandem with various legislative proposals to help Americans save more for retirement, Williams makes the case that, with auto portability, millions of participants will no longer find cashing out to be the easiest option when they switch jobs, and will preserve their retirement savings instead.
In the fourth installment of his five-part series on 401(k) cashout leakage, RCH's Tom Hawkins examines three policy options to address the problem, and finds that policies facilitating portability and addressing financial emergencies have the most promise. Facilitating portability, adds Hawkins, is extensively supported by research -- and in the case of auto portability -- has an already-established regulatory framework with no barriers to widespread adoption.
In a 9/12/19 interview with CNBC’s Squawk Box, Robert L. Johnson, Founder & Chairman of The RLJ Companies, and majority owner of Retirement Clearinghouse (RCH), goes in-depth on auto portability, praising the Trump administration’s favorable actions, while also noting the ongoing bipartisan support for the new plan feature. Johnson offers the CNBC panel a primer on how auto portability works, it’s significant benefits for Americans’ retirement security -- particularly minorities -- and the importance of gaining rapid adoption to deliver on its promise.
Writing in WealthManagement.com, Ed McCarthy chronicles the rising anticipation this summer, as industry observers expected the DOL to issue a final transaction exemption for RCH Auto Portability program. That guidance, McCarthy observes, occurred on 7/31/19, but not before the RCH program had already proven its value. McCarthy, speaking with RCH President & CEO Spencer Williams, draws attention to the prior deployment of the auto-portability technology in "pilot mode" for a large plan sponsor, where it has already located and matched over 6,000 accounts belonging to active participants in the plan. According to Williams, the combination of the DOL's guidance and the successful deployment of the technology will now allow RCH to "push [auto-portability} out into the market on a wholesale basis."
In her 8/23/19 article, carried in both PLANSPONSOR and PlanAdviser, reporter Rebecca Moore links the most-recent regulatory actions from the DOL on the RCH Auto Portability program with the 8/15/19 EBRI Issue Brief, which projects the overall, 40-year present value of auto portability at nearly $2 trillion. Moore addresses the key findings from the latest EBRI research, which include new projections of 401(k) cashout leakage ($92.4 billion in 2015), projections of auto portability as a standalone policy initiative, auto portability paired with other legislative proposals, and finally, the beneficial impact of auto portability on specific demographic segments.
In his latest article in Employee Benefit News, RCH President & CEO Spencer Williams draws much-needed attention to the downside of traditional safe harbor IRAs. While plans can benefit by practices that remove small-balance accounts, Williams argues that this benefit may be illusory, as former plan participants will likely cash out or become “stuck” with multiple accounts that deplete their savings – both scenarios that could expose sponsors to potential liability. Auto portability, says Williams, can reverse this dysfunctional dynamic, achieving better outcomes for plans and participants alike.
In his five-part series in 401k Specialist, RCH's Tom Hawkins sheds light on the problem of cashout leakage, a silent crisis that unnecessarily robs millions of Americans of their retirement security. In his third article in the series, Hawkins examines the magnitude of the 401(k) cashout leakage problem, sharing new statistics recently supplied by EBRI, and offering some interesting comparisons so the reader can fully-grasp the enormity of the problem.