- Press Releases
- Thought Leadership
- Consolidation Corner
- 401k Consolidation
- Auto Enrollment
- Auto Portability
- Automatic Rollovers
- Cashout Leakage
- DEI, ESG & Social Responsibility
- ERISA Advisory Council
- Lifetime Plan Participation
- Managed Portability
- Missing Participants
- Mandatory Distributions
- Mobile Workforce
- Plan Termination
- Public Policy
- Retirement Income
- Retirement Plan Portability
- Retirement Research
- Safe Harbor IRA
- Uncashed Checks
Writing in the Consolidation Corner blog, Renee Wilder Guerin, RCH's EVP of Public Policy, offers readers five reasons why a newly proposed U.S. Senate bill addressing auto portability is so important. The Advancing Auto Portability Act of 2022 -- co-sponsored by Senators Tim Scott (R-S.C.) and Sherrod Brown (D-Ohio), would offer tax credits to plan sponsors who implement auto portability, and codify rules for an industrywide auto portability network. The bill is expected to be rolled into the Senate version of the bipartisan Securing a Strong Retirement Act of 2022, which passed the U.S. House of Representatives on March 29 of this year.
Renée Wilder Guerin, RCH’s EVP of Public Policy, examines the 3/29/22 hearing held by the U.S. Senate Committee on Health, Education, Labor & Pensions (HELP), which focused on solutions that would enhance retirement security for Americans, particularly those who are under-served and under-saved. Two of the four witnesses, WISER’s Cindy Hounsell and The Aspen Institute’s Ida Rademacher offered testimony highlighting the benefits of auto portability in leveling the playing field for women, minorities, and lower income workers. The latest hearing, writes Wilder Guerin “builds on previous Senate hearings and fuels growing momentum for auto portability among legislators, policymakers, advocacy groups, providers and plan sponsors.”
Writing in the Consolidation Corner blog, RCH’s Tom Hawkins reports on the release of the ERISA Advisory Council’s latest report – “Gaps in Retirement Savings Based on Race, Ethnicity and Gender.” In that report, auto portability was specifically referenced multiple times in testimony by Cindy Hounsell, President of WISER, and the final report included a recommendation to “study the feasibility of a national portability system” – more commonly and accurately known as auto portability. Hawkins found the EAC’s recommendation “remarkable given the fact that it emanated from a diverse group of 14 industry experts holding a wide range of opinions on practically any topic.”
On 12/6/21, Kathleen Kennedy Townsend, Special Assistant to the Secretary of Labor for Retirement, served as the keynote speaker at EBRI's 90th Public Policy Forum, and outlined the big-picture, retirement-focused priorities of the DOL. One of the DOL's three priorities is the issue of portability and leakage. RCH's Tom Hawkins examines Townsend's remarks to her EBRI audience, which revealed that she has a clear grasp of the magnitude of the cashout leakage problem, as well as its most-promising solution – enabling plan-to-plan portability.
RCH's Tom Hawkins examines “second order effects” that can occur with retirement savings public policies currently that would dramatically expand access to, and participation in, defined contribution plans. While the benefits are impressive, additional undesired consequences can arise that are antithetical to the policies’ original intent, including increased cashout leakage, missing participants, uncashed checks and forgotten/stranded accounts. Understanding these highly predictable second order effects, Hawkins identifies plan-to-plan portability as a means of addressing them, while significantly boosting the overall policies’ benefits.
Refundable Saver’s Tax Credits Would Significantly Reduce Retirement Savings Shortfall—Especially for Minorities
Writing in RCH's Consolidation Corner, RCH President & CEO Spencer Williams examines pending retirement savings legislation, and focuses upon the benefits of a refundable saver's credit, which would be directly deposited into taxpayers' 401(k) and IRA accounts. Taking his analysis a step further, Williams considers the infrastructure required to transfer these funds to savers, and identifies considerable synergies with the existing technology that supports auto portability.
RCH’s newly-appointed EVP of Public Policy, Renée Wilder Guerin finds a lot to like in the 7/28/21 Senate Finance Committee hearing, where lawmakers heard testimony on how to increase retirement savings, including tackling the longstanding problems of cashout leakage, missing participants and “forgotten” retirement savings accounts. Wilder Guerin notes that auto portability was favorably mentioned twice by Aliya Robinson (SVP, Retirement & Compensation Policy for ERIC), as a policy initiative her organization – comprised of the nation’s largest plan sponsors – supports. Coming on the heels of EBRI’s 21st Annual Retirement Confidence Survey, where nearly 9 in 10 participants indicated their preference for the feature, Senate Finance Committee testimony “bodes extremely well for auto portability’s widespread adoption, as well as the enactment of public policies that further enhance it.”
Don’t Relegate Lost & Missing Accounts to the Lost & Found—Consolidate Them in the Retirement System
RCH’s President & CEO Spencer Williams, writing in the Consolidation Corner Blog, opines on draft provisions in SECURE 2.0 legislation that call for establishment of a “lost & found” – including housing sub-$1,000 balances for all terminating 401(k) participants. As proposed, Williams observes that simply moving sub-$1,000 balances to the PBGC does little to reduce cashouts or stranded savings and offers auto portability as a “far more constructive method” to reduce cashouts and to promote consolidation of retirement savings.