Auto Portability - Public Policy
Learn more about retirement savings public policy positions related to Auto Portability.
PLANSPONSOR: EBRI Links Women's Retirement Security, Auto Portability
PLANSPONSOR's Rebecca Moore examines new EBRI research that demonstrates the "large impact" that auto portability can have on reducing Gen Xer women's retirement savings shortfalls. When EBRI adds auto portability to their projection model, Moore reports that the average shortfall for those with 21 to 30 years of future DC eligibility is reduced by 21% for single females to as much as 38% for widowers.
Sidecar accounts can help plug 401(k) leakage to an extent
In his latest article in Employee Benefit News, RCH President & CEO Spencer Williams examines the impact of "sidecar" accounts, which he views as a positive trend and a feature that could serve as a useful tool in the struggle to curtail leakage of savings from defined contribution plans. Williams also contends auto portability will be essential to plugging the biggest hole in the retirement system’s "bucket" -- cashout leakage -- which represents 89% of the overall leakage problem.
ThinkAdvisor: Women's Retirement Income Shortfall Improved by Auto Portability
ThinkAdvisor's Michael S. Fischer takes a deep dive into EBRI research that examines the gender disparity in retirement savings deficits projected for single women and widows. Fischer also highlights the EBRI finding that, for employees with 21 to 30 years of future DC plan eligibility, auto portability reduced the average retirement savings shortfall by 21% for single women and by as much as 38% for widowers.
EBRI Research Reveals Auto Portability's Benefits to Generation X Women
New EBRI Research, released 1/17/19, reveals a troubling Retirement Savings Shortfall (RSS) that is significantly higher for Generation X women, including both single females and widows, than for their counterparts. However, EBRI also found that auto portability made a "significant dent in these retirement deficits." According to EBRI, with auto portability "we found at least a double-digit percent reduction for all groups with future years of defined contribution plan eligibility, and for those with 21–30 years of eligibility, we found a 21 percent reduction in deficits for single females and a 31 percent reduction for widows."
Retirement Industry Associations in Alignment on 401k Auto Portability
401(k) Specialist contributor Tom Hawkins examines the official public comments by large,
retirement-focused organizations on the proposed RCH Auto Portability
Prohibited Transaction Exemption (PTE), which were posted on 1/7/19.
Some distinguished retirement industry organizations weighed in,
representing a diverse cross-section of stakeholders, including: retirees,
women, businesses, plan sponsors, retirement industry professionals, securities
firms, banks, and asset management companies. If their feedback is any
indication, then auto portability has a bright future.
Retirement Industry Associations Weigh in on Auto Portability
At the end of 2018, major retirement industry organizations
were asked to comment on the DOL’s proposed prohibited transaction exemption
(PTE) for the Retirement Clearinghouse (RCH) auto portability program.
After a brief delay brought about by the partial federal government shutdown,
all official comments have been publicly posted. If the views of these
organizations are any indication, auto portability has a bright future.
Michael Barry Gives DOL an 'A' on Auto Portability
In his ongoing "Barry's Pickings" column for PLANSPONSOR, Michael Barry, president of O3 Plan Advisory Services LLC, gives the U.S. Department of Labor an 'A' for its November 2018 issuance of a proposed Prohibited Transaction Exemption (PTE) and an Advisory Opinion on Auto Portability. Barry adds: "as a long-time advocate of the establishment of a clearinghouse, I view this as very good news."
WISER Publication Features Auto Portability
In an article carried in their WISERWoman Fall 2018 newsletter, the Women's Institute for a Secure Retirement (WISER) spreads the "good news" that the U.S. Department of Labor has issued an Advisory Opinion on auto portability, clearing the path for the automatic transfer of small 401(k) balances of $5,000 or less. The WISER article also notes that women are hard-hit by retirement savings cashout leakage, with 2.4 million women cashing out $28 billion per year from 401(k) plans.
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