News

What’s missing from many plans? Current addresses for participants

Writing in Employee Benefit News, RCH President & CEO cautions plan sponsors to be wary of an increased incidence of missing participants arising from COVID-19 related migration patterns. To make the case, Williams links 2020 migration data with recent address location research conducted by RCH. Taken together, these data points suggest that sponsors could soon be faced with a higher-than-expected incidence of "hidden" stale addresses. Williams suggests that sponsors respond with a program of "robust missing participant search techniques" including the use of more-reliable, "optimized" electronic searches.

Want to Avoid Legal Jeopardy? Adopt Solutions That Enable Portability for Small Accounts

Writing in Benefits Quarterly magazine, RCH founder, president and CEO Spencer Williams examines the multi-faceted problem of "small accounts" and describes how plan sponsors, providers and recordkeepers can take proactive measures to solve the problem by adopting auto portability. By adopting auto portability, Williams contends that the improved outcomes for participants could "mitigate the risk of 401(k) fee lawsuits and other legal actions down the line."

Participants still support automatic portability of 401(k)s: survey

Reporting on EBRI's release of their 31st Annual Retirement Confidence Survey (RCS), BenefitsPRO's Alan Goforth highlights the survey's key finding that "nearly nine in 10 employees with access to an employer-sponsored defined contribution plan consider auto-portability to be a valuable benefit" while observing that "those participants who stand to benefit the most from auto-portability — including minorities, younger participants and lower-income workers — want it most." Goforth quotes RCH founder, president and CEO Spencer Williams, as well as EBRI president and CEO Lori Lucas.

Joint Committee on Taxation Releases Leakage Study

On 4/26/21, The Joint Committee on Taxation, a nonpartisan committee of the United States Congress, released the report "Estimating Leakage from Retirement Savings Accounts." Taking a novel approach, the report examines tax data to calculate a "leakage ratio" that represents the ratio of net distributions to net contributions for participants 50 or younger. The study clearly identified job-changing as the chief cause of leakage, finding that the leakage ratio is 26% in the "year of the event" but remaining high in years 2-5 that follow. The report further concludes that the use of "forced distributions and portability of plans likely affect leakage."

Why the Case for 401k Auto Portability Just Got Stronger

With the 4/22/21 release of EBRI's 31st annual Retirement Confidence Survey (RCS), the case for auto portability just became a whole lot stronger. Why? RCH's Tom Hawkins, writing in 401k Specialist, points readers to the RCS finding that nearly 9 in 10 participants believe that auto portability would be a valuable plan feature. Even more impressive than the overall response, the survey also found that specific demographic segments that benefit the most from auto portability want it even more -- including minorities, younger age groups and lower income segments. Hawkins' piece also includes a link to a new video, The Case for Auto Portability.

RCH's Spencer Pringle Quoted in US News & World Report

In her 4/7/21 article in US News & World Report "Factors to Consider Before Cashing Out a 401(k)" Rachel Hartman advises readers to consider the long-term repercussions of prematurely cashing out. Hartman quotes RCH's Spencer Pringle, who suggests that participants first think carefully about whether or not the need is for a true financial emergency. If it is, Pringle further suggests that participants identify the amount required to satisfy the emergency, keeping the remaining amount invested for retirement.

Also featured in Yahoo! News and MSN Money

Portability on Steroids: Let’s See It! – Part Two

In part 2 of their 2-part interview, RCH’s Spencer Williams continues to discuss auto portability with Lisa Massena, Founder of Massena Associates. In part 2, Williams turns to the importance of Alight Solutions (the first large recordkeeper who has adopted auto portability), touches on a range of views on auto portability from within the DC Beltway, and offers his insight on broader issues, including the overall level of retirement savings coverage.

Portability on Steroids: Let’s See It!

In part 1 of their 2-part interview, RCH’s Founder, President & CEO Spencer Williams takes on the topic of auto portability with Lisa Massena, Founder of Massena Associates and publisher of the Retirement Security Matters newsletter. In part 1, their conversation highlights the fundamental dynamics driving the need for auto portability and offers readers a primer on how auto portability works.