Public Policy

4 Reasons Why 401k Auto Portability is Inevitable

Writing in 401k Specialist, RCH's Tom Hawkins offers an optimistic assessment of the prospects for auto portability. Hawkins, a self-confessed "long-time, unabashed proponent" of auto portability, has recently concluded that the feature's eventual, widespread adoption is "inevitable" and supports his position with four key points.

The Aspen Leadership Forum on Retirement Savings

In a publication released 1/6/2022 as part of the Aspen Institute's Financial Security Program, the 2021 Aspen Leadership Forum on Retirement Savings Report is a summary of the April 2021 Aspen Leadership Forum on Retirement Savings. The Forum's report devotes a page to "Six Stats That Tell the Portability Story" which notes the propensity of American workers to change jobs and to cash out. It also mentions two compelling statistics: 1) that 85% of participants like the idea of automatic portability and 2) that 57% of retirement experts supported a government mandate for auto portability, while almost half (48%) believed that automatic portability was feasible without such a mandate.

What the Pension Protection Act has taught us about saving for retirement

Writing in Employee Benefit News, RCH President & CEO Spencer Williams marks the 15th anniversary of the Pension Protection Act (PPA) and offers his views on the unintended consequences of that legislation. Acknowledging that the automatic enrollment feature has been successful in increasing plan participation, Williams notes that the feature also resulted in a “sharp uptick in small, stranded 401(k) savings accounts” that – absent easy plan-to-plan asset portability – has led to increased participant fees as well as higher levels of cash outs. In response, Williams observes that “the private and public sectors have worked together to create solutions” such as auto portability, which can help rectify the PPA’s flaws, and allow Americans to save more for retirement.

Solving 401k Portability and Cashout Leakage a Key DOL Priority

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. Writing in 401k Specialist, 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.

The Great Resignation Doesn’t Have to Derail 401(k) Savers

Writing in the print edition of 401k Specialist Magazine, Managing Editor Brian Anderson examines the growing concern over the phenomenon known as the 'Great Resignation' and its highly negative, potential impact on the retirement security of millions of job-changing Americans. After examining the problem, Anderson identifies auto portability as the 'antidote' to the Great Resignation -- quoting a prior piece by RCH's Tom Hawkins that stated: "No other program or public policy option even comes close, including the proposed establishment of a retirement savings 'lost and found.'"

Kennedy Townsend: Solving Portability and Cashout Leakage are a Key DOL Priority

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.

Townsend Outlines DOL’s Retirement Priorities

NAPA Net's Ted Godbout covers EBRI's Winter Policy Forum, where Kathleen Kennedy Townsend, Special Assistant to the Secretary of Labor for Retirement, served as a keynote speaker 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. Townsend, writes Godbout, cited leakage statistics and noted that the problem disproportionately affects those with balances below $5,000, and had communicated with many who "had not transferred their retirement accounts because it’s so frustrating."

Tax credits would help narrow wealth disparities and bolster retirement savings

Writing in Employee Benefit News, 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.

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