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Retirement Clearinghouse in the News
Find news articles referencing RCH and our services, including Auto Portability
PLANSPONSOR: Groom's Saxon Welcomes DOL's Auto Portability Guidance
In the January 2019 edition of PLANSPONSOR magazine, Groom Law Group's Stephen Saxon welcomes the U.S. Department of Labor's (DOL) November 2018 guidance on the RCH auto portability program. The DOL, says Saxon, "clarifies important questions about the fiduciary implications for plan sponsors" and provides "much welcome comfort" to plan fiduciaries considering the program. Saxon concludes his analysis by stating that "auto-portability will have a positive, long-term impact on the U.S. retirement system by reducing leakage and enabling American workers to consolidate their small retirement balances on an efficient basis."
[Requires free online subscription to PLANSPONSOR]
401(k) Plan Enhancements Linked to Richer Retirements
In his 2/5/19 article in HR Today, SHRM's Stephen Miller examines how plan sponsors are focusing on automation and lowering plan fees. On the topic of lowering plan fees, Miller quotes RCH's Tom Hawkins, who advises that a "blanket policy of attempting to retain all former employees' accounts as a means of increasing assets and thereby reducing plan fees is problematic" -- particularly when it comes to small-balance accounts. These accounts, Hawkins explains, "will only marginally increase plan assets and could result in increased administrative costs and fiduciary risk associated with higher levels of missing participants" that plan sponsors may no longer be able to locate.
Kiplinger: How to Avoid Cashing Out Your 401(k)
Kiplinger's Brendan Pedersen examines the favorable impact that the U.S. Labor Department's ruling on auto portability could have on 401(k) cashout leakage. At a macro level, Pedersen cites figures from Deloitte Consulting, which show that cashouts by workers with less than $5,000 saved could cost Americans $2 trillion over the next decade. At the individual level, Pedersen uses an illustration provided by Mike Giefer, CFP, who states “if they don’t retire for 40 years, that money invested could have been worth $75,000.”
NAPA Net Cites EBRI Research on Women, Auto Portability
In his 1/24/19 NAPA Net article "EBRI: Single Women Face Significant Retirement Savings Shortfall", reporter Ted Godbout joins other media outlets in analyzing new EBRI research that projects a significant retirement savings shortfall for Generation X's women -- particularly single women and widows. Godbout also draws attention to EBRI's finding that auto portability, when applied to the problem, will result in "at least a double-digit percent reduction in the shortfall for all groups."
PLANSPONSOR: EBRI Links Women's Retirement Security, Auto Portability
PLANSPONSOR's Rebecca Moore examines new EBRI research that demonstrates the "large impact" that auto portability can have on reducing Gen Xer women's retirement savings shortfalls. When EBRI adds auto portability to their projection model, Moore reports that the average shortfall for those with 21 to 30 years of future DC eligibility is reduced by 21% for single females to as much as 38% for widowers.
Sidecar accounts can help plug 401(k) leakage to an extent
In his latest article in Employee Benefit News, RCH President & CEO Spencer Williams examines the impact of "sidecar" accounts, which he views as a positive trend and a feature that could serve as a useful tool in the struggle to curtail leakage of savings from defined contribution plans. Williams also contends auto portability will be essential to plugging the biggest hole in the retirement system’s "bucket" -- cashout leakage -- which represents 89% of the overall leakage problem.
ThinkAdvisor: Women's Retirement Income Shortfall Improved by Auto Portability
ThinkAdvisor's Michael S. Fischer takes a deep dive into EBRI research that examines the gender disparity in retirement savings deficits projected for single women and widows. Fischer also highlights the EBRI finding that, for employees with 21 to 30 years of future DC plan eligibility, auto portability reduced the average retirement savings shortfall by 21% for single women and by as much as 38% for widowers.
EBRI Research Reveals Auto Portability's Benefits to Generation X Women
New EBRI Research, released 1/17/19, reveals a troubling Retirement Savings Shortfall (RSS) that is significantly higher for Generation X women, including both single females and widows, than for their counterparts. However, EBRI also found that auto portability made a "significant dent in these retirement deficits." According to EBRI, with auto portability "we found at least a double-digit percent reduction for all groups with future years of defined contribution plan eligibility, and for those with 21–30 years of eligibility, we found a 21 percent reduction in deficits for single females and a 31 percent reduction for widows."