News

Two Saver’s Match Resources Now Available

In their 8/29/24 Product & Services Launches report, PLANSPONSOR writes that Retirement Clearinghouse (RCH) has "launched two new Saver’s Match resources that offer plan sponsors, plan providers and participants consolidated information about the Saver’s Match, as well as a new saver-focused tool—the Saver’s Match Estimator—which will calculate an estimated matching contribution under the program."

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The Risky Business of Cashing Out Plan Balances Below $1,000

Writing in 401k Specialist, RCH's Tom Hawkins examines the “risky business” of automatically cashing out sub-$1,000 balances of separated participants. Hawkins writes that the practice, “may seem like an expedient approach to rid a plan of small balances” but “carries undesirable side effects for both the plan and for its participants” including uncashed distribution checks and unnecessary cashout leakage. The best approach, continues Hawkins, is to “adopt auto portability, which delivers all of the benefits but none of the flaws of old-school automatic rollovers.”

The Scramble to Make the Saver’s Match Work

PlanAdviser's Alex Ortolani reports on the increasing attention being paid to the Saver's Match program as the 2027 target date for the measure's implementation draws closer. Industry groups such as the Pew Charitable Trusts and the Bipartisan Policy Center, acknowledge there could be issues for the program in addressing "the plumbing with recordkeepers." Ortolani turns to RCH CEO Spencer Williams, who indicates that the Saver's Match program could benefit from auto portability technology being deployed by the Portability Services Network, stating that the "utility can be modestly tweaked so the U.S. Treasury can....identify a taxpayer, select a dollar amount and get the money into their plan. At the end of the day, you have to move the money to make it work.”

SECURE 2.0’s Saver’s Match: The Promise and The Challenges

Writing in 401k Specialist, RCH's Tom Hawkins takes stock of the Saver's Match program, slated to begin operation with the 2027 tax year. While research is still ongoing, Hawkins notes that the picture being revealed is one of massive potential to increase retirement savings and to help close the minority wealth gap. These benefits may not come easily, given the sheer size of the population affected by the Saver’s Match, and the challenges that the program could face in getting up-to-speed. At the Annual iOme Challenge Forum, held on 6/20/24 by the Women’s Institute for a Secure Retirement (WISER), RCH & PSN President and CEO Spencer Williams, along with Morningstar’s Jack VanDerhei, outlined both the promise and the challenges represented by the Saver’s Match.

Upcoming Trends in Plan Design: From the Perspective of a Retiring Plan Sponsor

PLANSPONSOR's Remy Samuels reflects on the pending retirement of Carl Gagnon, assistant vice president of global financial well-being and retirement programs at Unum Group, and "[k]nown for innovative plan design ideas and offering a wide swath of benefits to his employees." In recounting his legacy of innovation, Samuels notes that Unum Group has elected to adopt auto portability, as delivered by the Portability Services Network. "We think that’s going to be extremely attractive to our new hires,” Gagnon says. “We’re trying to make it easier for our employees to consolidate their assets into one plan and into one company so they can manage it all.”

What Optional SECURE 2.0 Provisions Are Plan Sponsors Most Likely to Adopt?

NAPA Net's Ted Godbout reports on the results of a new plan sponsor survey, conducted by Fidelity Investments "to gain a better understanding of what optional provisions of the SECURE 2.0 Act that plan sponsors are most likely to adopt." The survey found "high interest" in auto portability, a service which they expect to be a "standard offering." Godbout also writes that, "for larger plans, withdrawals for emergency expenses was replaced by auto-portability by corporate plan sponsors" and that "plan sponsors in finance and manufacturing both ranked auto-portability as a top option." The Fidelity report can be downloaded here.

Talking Points: How to SECURE 'Better' Retirements

Writing in NAPA Net, Nevin Adams draws attention to the Saver's Match provisions of SECURE 2.0, and finds some promising information contained in the projections supplied by Morningstar's Jack VanDerhei, and survey results recently published by Boston Research Technologies (BRT) and Retirement Clearinghouse (RCH). Adams notes that Morningstar's research predicts outsized Saver's Match benefits will accrue to minorities -- but particularly to Black and Hispanic females -- while the BRT-RCH survey estimates that the Saver's Match could drive increased levels of saving among existing participants, while simultaneously increasing the participation levels of non-savers.

The Truth About Old-School Automatic Rollovers

Writing in 401K Specialist Magazine, RCH’s Tom Hawkins takes on “old-school” automatic rollover programs which produce massive amounts of cashout leakage and strand millions of participants’ balances in safe harbor IRAs. While old-school automatic rollovers have one foot in the past, Hawkins writes: “automatic rollovers that incorporate auto portability are the way of the future, with the industry-led Portability Services Network leading the way forward.” For plan sponsors, contends Hawkins, “auto portability delivers all the plan optimization features of old-school automatic rollover programs but goes one key step further” by automatically rolling-in eligible balances for new plan participants.