Auto Portability - Public Policy
Learn more about retirement savings public policy positions related to Auto Portability.
In response to the U.S. Department of Labor’s (DOL) Employee Benefits Security Administration’s (EBSA) recent approval of the RCH Auto Portability program, the American Benefits Council commended the agency for its efforts to address the problems of leakage and missing participants. It also suggested that the DOL extend RCH's portability exemption to pre-existing safe harbor IRAs. In a December 20th letter to the DOL, the Council voiced its support, noting that the proposed exemption “appears to include sufficient safeguards for participants, including an extensive set of notice requirements.”
In his 12/17/18 opinion piece in The Daily Caller, Paris Dennard examines some of the Trump administration's economic policies toward black Americans, identifying the Labor Department's auto portability rule change as "allowing Americans, especially minorities, the ability to preserve their retirement savings when they change jobs."
RealClear Politics' Ian Schwartz covers the 12/12/18 White House event marking the establishment of the White House Opportunity and Revitalization Council, and focuses specifically on remarks made by the RLJ Companies founder and Retirement Clearinghouse majority owner Robert L. Johnson. In his remarks, Mr. Johnson thanks the administration for the Department of Labor's recent actions on Auto Portability, noting that the auto portability program could result in "close to $800 billion" in incremental retirement savings for minority Americans.
On 12/12/18, President Donald J. Trump signed an executive order establishing the White House Opportunity and Revitalization Council, intended to facilitate long-term equity investments in low-income communities designated as "qualified opportunity zones." Among the distinguished guests at the event was entrepreneur Robert L. Johnson, founder of the RLJ Companies and majority owner of Retirement Clearinghouse. Mr. Johnson took the opportunity to congratulate the administration and Sen. Tim Scott (R-SC) for their role in the Department of Labor's recent Advisory Opinion on auto portability, noting that auto portability will preserve $800 billion in minorities' retirement savings.
Video available on YouTube's White House channel here (queued to start at the President's introduction of Mr. Johnson)
In her 12/4/18 article in MarketWatch, noted economist and retirement researcher Alicia H. Munnell applauds the Department of Labor's favorable actions toward the RCH auto portability program. Munnell highlights the dilemma facing millions of Americans each year, who leave their jobs and cash out their retirement savings, and cites the ongoing efforts by RCH's Spencer Williams and Tom Johnson in crafting the solution, auto portability. Munnell aptly characterizes auto portability's recent progress as being "so lovely to see a win for the 401(k) system."
Also featured in Morningstar News (link)
In his 11/19/18 opinion piece in The Hill, former U.S Treasury official and senior fellow in economic studies at The Brookings Institution Mark Iwry writes about his personal, 22-years long advocacy for 401(k) portability, dating back to the Clinton administration. Not much had changed in that time, says Iwry, until last week's guidance by the Department of Labor (DOL) on auto portability, led by the efforts of RCH executives Spencer Williams and Tom Johnson. With the way cleared by the DOL, Iwry notes that auto portability's success will now depend on the "willingness of recordkeepers...to cooperate so participants can enjoy expanded portability."
In her 11/12/18 article in The Wall Street Journal, reporter Anne Tergesen addresses the pair of recent DOL actions that give Retirement Clearinghouse (RCH) a green light to move forward with its auto portability program. In support of the DOL's actions, Tergesen cites industry statistics on 401(k) leakage for job-changing participants, quoting industry figures from Morningstar, Boston College's Center for Retirement Research and former U.S. Treasury official Mark Iwry. Tergesen turns to RCH Chief Executive Spencer Williams, who addresses RCH's objectives in obtaining DOL guidance, as well as RCH's views on the benefits of the auto portability program.
The Department of Labor (DOL) has issued Advisory Opinion 2018-01A on RCH Auto Portability, which can be accessed on the DOL’s website at this link. The DOL’s Advisory Opinion states that defined contribution plan sponsors who accept automatic rollover contributions under auto portability will not be a fiduciary with respect to those contributions. This fiduciary “safe harbor” represents an important step to facilitate auto portability’s widespread adoption by plan sponsors, as well as their recordkeepers.