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Auto Portability - Public Policy
Learn more about retirement savings public policy positions related to Auto Portability.
ThinkAdvisor's Melanie Waddell reports on the recent introduction of HR 9252, which codifies auto portability, the seamless transfer of retirement accounts from employer to employer. The House bill was co-sponsored by Rep. Ron Estes (R-KS) and Rep. Brad Schneider (D-IL), and Waddell turns to Groom Law Group expert Steve Saxon to weigh in on the proposed legislation. The bill, says Saxon: “reduces [DC plan] leakage by making it easy for an individual to manage all their retirement assets in one place.” Waddell reports that the House bill is a companion version of legislation previously introduced into the U.S. Senate, and writes that "the bills may be included in the Secure Act 2.0 retirement legislation that’s expected to pass during the lame-duck session of Congress."
Writing in the legal publication Law360, reporter Jared Serre notes that the introduction of a bill (HR 9252) in the U.S. House of Representatives "would allow for the automatic rollover of savings from 401(k) accounts from one employer to another after a job change is made." The bill, which complements provisions previously introduced in U.S. Senate legislation, was co-sponsored by Rep. Ron Estes (R-KS) and Rep. Brad Schneider (D-IL).
In an opinion piece for The Hill, U.S. Senators Tim Scott (R-SC), and Sherrod Brown (D-OH) team up to make a convincing bipartisan case for auto portability, which the legislators are seeking to further with the Advancing Auto Portability Act of 2022, provisions of which were subsequently incorporated into a broader Senate bill. Scott and Brown view auto portability as an urgent and necessary remedy to the problem of cashout leakage, writing that auto portability "would solve this [leakage] problem by allowing workers to automatically roll over savings from their previous employer to a new employer." They close with an appeal to fellow legislators, writing: "[w]e encourage our colleagues to support this bipartisan, commonsense legislation that will create a more secure financial future for American workers, and save people precious time and money."
When it comes to 401(k) diversity, equity, and inclusion (DEI) initiatives, RCH’s Tom Hawkins observes broad support for expanded access and automatic features, since they “are supportive of increasing participation and asset accumulation across all demographics.” No one, writes Hawkins, points to ‘traditional’ automatic rollovers as facilitating DEI goals, as they “penalize the very demographic segments that DEI initiatives strive to uplift.” Hawkins urges plan sponsors to re-tool ‘traditional’ automatic rollover programs to include education and assistance and to incorporate auto portability – delivering more equitable retirement outcomes for under-saved and under-served participants.
In observance of National 401(k) Day on Friday, September 9th, RCH's Tom Hawkins takes the opportunity to reflect on the long-running, highly successful public-private collaboration that has fostered the rapid ascendance of America’s 401(k) system. Writing in 401k Specialist Magazine, Hawkins states that "this partnership will continue to drive innovations that will expand and improve the 401k system for millions of Americans – not only helping them to save more but preserving more of their savings for retirement."
Steff Chalk, 401kTV's Managing Editor, informs readers about new Pew Charitable Trust research that finds 401(k) fees can be lower than IRA fees, often by a wide margin. Chalk links the research findings to auto portability, noting that policymakers could act by "furthering auto portability as a way to transfer assets between retirement plans."
EBN's Stephanie Schomer interviews 401(k) legend Ted Benna, responsible for designing and implementing the first 401(k) savings plan, and Mandy Zatto, co-founder and principal, Strategic Benefits Advisors. When the topic turns to job-changing participants and how to protect their nest egg, both Benna and Zatto find praise for auto portability, for Retirement Clearinghouse, and for the recently-introduced Senate legislation containing provisions that support the new plan feature.
In their ongoing podcast series featured in NAPA Net, American Retirement Association Chief Content Officer Nevin Adams and ERISA fiduciary expert Fred Reish discuss the latest retirement public policy initiatives to emanate from Washington, DC. In their discussion, Adams and Reish focus extensively on the Senate's Enhancing American Retirement Now (EARN) Act of 2022. The podcast's hosts go in-depth on the bill's auto portability provisions, which they view highly favorably, and Adams supplies listeners with an excellent overview of how auto portability works.