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The Fundamentals of Locating Missing Participants

The Small Account Problem

For plan sponsors, the small accounts left behind by terminated participants pose administrative headaches that, if left unchecked, can lead to serious problems.

As the illustration shows, small account problems work like an interlocking puzzle to drive:

  • Plan administration issues, including:
    • Increased plan expense
    • Lost or missing participants
    • Uncashed checks
    • Increased risk of plan audits
  • Financial wellness issues for plan participants, including:
    • Higher levels of cash out leakage
    • Lost earnings and excess fees
Some plan sponsors attempt to address the small account problem with traditional solutions, but these tactics don’t target the root causes of the problem and only create an endless cycle of problems.

For example, many sponsors attempt to lower their plan expenses by rolling the small accounts of terminated participants with under $5,000 into traditional safe harbor IRAs, while automatically cashing out accounts with less than $1,000. While these tactics offer temporary relief, they also foster longer-term problems, since a traditional automatic rollover process typically drives cash out leakage levels as high as 60%, and many participants who are automatically cashed out may not actually cash their checks, creating yet another administrative nightmare.

RCH Portability Services Solve the Small Account Problem

Fortunately for plan sponsors, Retirement Clearinghouse offers solutions that minimize the small account problem, by addressing its root causes.

RCH Automatic Rollover Service - More than a traditional automatic rollover, the RCH Automatic Rollover Service is the enhanced standard of care for an automatic rollover program, reducing cashouts by 52%, while helping participants receiving mandatory distributions (<$5,000) consolidate their retirement savings into their current-employer's plan. The RCH Automatic Rollover Service is also the first & only automatic rollover program to incorporate the auto portability feature. Learn more about auto portability by clicking here.

RCH Managed Portability is for all participants, all balances and relies upon participant consent to consolidate retirement savings. Our Assisted Roll-In and Assisted Roll-Out services provide participants with education and end-to-end assistance in consolidating their retirement savings into their current-employer's plan or into an existing IRA.

RCH also delivers the following services:

Call 1-866-827-9608 to speak with an RCH Sales Representative, or e-mail us.

Individual RCH accountholders -- to manage your RCH account, visit the Manage Your RCH IRA Account page.

The Fundamentals of Locating Missing Participants

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