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Auto Portability - Public Policy
Learn more about retirement savings public policy positions related to Auto Portability.
The New York Times' Charlotte Cowles examines the problem facing millions of Americans who'll change jobs, leaving behind retirement savings at their former employer, or worse -- cashing out their savings altogether. Cowles turns to Vanguard's Steve Holman, who characterizes auto portability as the easiest, default solution, stating: “[a] participant doesn’t even have to do anything. You go to a new job, open a new plan, and the Portability Services Network will automatically find your old account and transition those assets in short order.” Holman also expresses confidence that "over time, we’ll have broad adoption across the industry" of auto portability.
Writing in 401k Specialist, Tom Hawkins examines the past, present and potential future of automatic enrollment, the popular 401(k) plan feature that has made great strides since 2007, but has faced headwinds in achieving adoption in high-turnover enterprises. Now, thanks to a SECURE 2.0 mandate for new plans, along with the retirement industry's embrace of auto portability, auto enrollment may soon undergo a "renaissance" and enter its final phase of growth, delivering disproportionate benefits to under-saved and under-served workers, including minorities, women and those with lower incomes.
Writing in Employee Benefit News, Spencer Williams, CEO of Portability Services Network (PSN) and Retirement Clearinghouse (RCH), makes a compelling case for plan advisers to help facilitate the roll-out of auto portability to the plan sponsors and participants they serve. Williams cites two recent headline-grabbing events -- the passage of SECURE 2.0, which incorporates provisions for auto portability, and the October 2022 formation of PSN to function as an industry utility for transferring balances from plan-to-plan. As both participants and plan sponsors stand to realize tremendous benefits from the adoption of auto portability, it "presents an easy opportunity for financial advisors" who will be "able to demonstrate value for their clients – and, in the process, grow their practices."
P&I reporter Courtney Degen briefs readers on the Department of Labor's 2023 priorities, as articulated on Tuesday, 2/28/23 by Lisa Gomez, assistant secretary of labor for EBSA, and which Degen indicates will "include implementing SECURE 2.0 and its new ESG rule, while aiming to improve communication with plan participants and beneficiaries." Degen writes that "[t]he retirement security package, which Congress passed in late December, directs the Labor Department to help implement various provisions, including one that codifies the auto-portability process into law."
PLANSPONSOR's Paul Mulholland covers the address made by Lisa Gomez, the assistant Secretary of Labor for the Employee Benefits Security Administration, to the National Institute on Retirement Security’s Retirement Policy Conference on Tuesday, 2/28/23. In the address, Mulholland writes that Gomez addressed the DOL's key priorities resulting from passage of the SECURE 2.0 Act of 2022, and that Gomez included references to auto portability.
Writing in 401k Specialist, Northern Trust's Lee Freitag offers his take on the five most meaningful provisions included in SECURE 2.0 legislation. Making Freitag's top 5 list is auto portability, which he writes will "provide plan sponsors [with] services to effectuate transfers to the employees' new plan, making it less likely workers will forget about balances left behind when they change jobs."
New York Times 'Your Money' columnist Ann Carrns writes that "[m]oving retirement savings when switching jobs is about to get easier for millions of workers with small balances" -- identifying the driving force as the formation of the new Portability Services Network, launched in October 2022 by "three big 401(k) administrators" in conjunction with Retirement Clearinghouse (RCH). Taking a Q&A approach, Carrns turns to Alight Solutions' Greg Long, Fidelity's Kevin Barry and Vanguard's Steve Holman, as well as RCH & PSN Founder, President & CEO Spencer Williams.
Bloomberg Law reporter Austin Ramsey examines provisions of SECURE 2.0 legislation that helps "reunite millions of Americans with retirement accounts they lost by switching jobs or leaving the workforce." Focusing on auto portability and the retirement savings lost & found registry, Ramsey turns to industry experts, including RCH and PSN President & CEO Spencer Williams, and Fidelity's Sterling Ingui. Williams cites the complementary aspects of these provisions, stating: “Without auto-portability and these other measures, the expanding access provisions of SECURE 2.0 will be sub-optimal. They wouldn't work." Ingui adds that "provisions for auto-portability...reinforce the work and the mission that brought us together to help the minorities, the women, the low-income earners, and young workers" who frequently change jobs and cash out their retirement savings.