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Retirement Clearinghouse in the News
Find news articles referencing RCH and our services, including Auto Portability
PLANSPONSOR Features RCH Analysis on Missing Participants and Cashouts
PLANSPONSOR's Rebecca Moore examines recent analysis by Retirement Clearinghouse that looks at the twin problems of 401(k) missing participants and cashouts. The RCH analysis, based upon RCH's Auto Portability Simulation and Boston Research Technologies' March 2018 Missing Participant Survey, compares and contrasts the two problems from a systemic perspective, and offers auto portability as a strategic solution to minimize both. Moore's piece also references a previous article by RCH CEO Spencer Williams, and quotes RCH's Neal Ringquist and Tom Hawkins.
401kTV Reviews WSJ Article on Cashout Leakage; References RCH
401kTV's Robyn Kurdek reviews an 8/10/18 Wall Street Journal article by Anne Tergesen, which focuses on rising levels of cashout leakage linked to the growing adoption of automatic enrollment provisions. Similar to the original article in the Journal, Kurdek also cites data from Retirement Clearinghouse, indicating that "slightly more than 60% of 401(k) participants with balances of less than $10,000 cash out their savings."
401(k) Auto-Enrollment Connected to Early Withdrawals, With Housing Implications
RISMedia's Liz Dominguez covers recent research by Alight Solutions LLC on the benefits and disadvantages of auto-enrollment, and considers how these issues could impact behaviors in the real estate market. Dominguez cites the RCH cashout figure of 60% for balances less than $10,000, recently featured in The Wall Street Journal.
RCH in EBN: The next big advancement for the 401(k)
As the 40th anniversary of legislation enabling the 401(k) draws near, RCH President & CEO Spencer Williams predicts that the next big advancement for the 401(k) will be the “seamless portability and consolidation” brought about by auto portability. The benefits that auto portability will deliver, estimated by EBRI to be as much as $1.5 trillion, could be “right around the corner” and will help millions of Americans achieve a financially secure retirement.
401k Specialist: A Tale of Two 401(k) Balance Segments
In his August 2018 article in 401k Specialist, RCH's Tom Hawkins reveals new research predicting 401(k) participant outcomes following separation for two balance segments – those above & below $15,000. Using logic developed in the Auto Portability Simulation to track & tally participant outcomes 8 years following separation, the results reveal a startling contrast between the two segments – with participants in the over-$15,000 segment experiencing far-superior outcomes to those in the under-$15,000 segment. To address the disparities, Hawkins advocates for a new “automatic” in the form of auto portability.
Advisors, Don’t Let Your Clients Throw Away Their 401(k)s
Advisor News contributor Brian O'Connell urges advisors to "step in and save 401(k) cash out takers from themselves" by emphasizing the downside. To make his point, O'Connell utilizes market research from Retirement Clearinghouse, which reveals that 6 million, or 41% of all 401(k) job-changers will cash out each year. O'Connell also quotes RCH's Tom Hawkins, who states "participants who have cashed out have effectively removed themselves from the defined contribution system, as if they'd never enrolled."
401(k) or ATM? WSJ Article Examines Cashouts, Features RCH Data
The Wall Street Journal's Anne Tergesen takes a look at the latest research on auto-enrolled participants in 401(k)-style plans, which finds that these workers tend to treat these savings "like automated-teller machines" -- a phenomenon known in the retirement industry as "leakage." To support her point, Tergesen uses data supplied by Retirement Clearinghouse (RCH), indicating that 60% of 401(k) participants with balances below $10,000 will cash out their savings, paying income taxes and a 10% penalty. Tergesen also notes that "policy experts recommend automating the process of transferring money from an old employer's plan to a new employer's plan" -- a process known as auto portability.
US sends ‘myRA’ accounts to Retirement Clearinghouse
On 8/9/18, the Editorial Staff of the Retirement Income Journal reported that the Treasury Department will transfer remaining, unmoved assets from the myRA program (discontinued in 2017) into Roth IRA accounts at Retirement Clearinghouse (RCH). The article references the notice posted on the myRA.gov website, which provides current myRA accountholders with instructions on how to withdraw or transfer their balances prior to the deadline of August 31, 2018, as well as providing information about going-forward arrangements for account balances that are moved to RCH. Also highlighted are RCH's ongoing efforts to obtain regulatory approval for auto portability, a clearing system that will "automatically transfer 401(k) assets....when a participant changes jobs."
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