Public Policy

Assistant Secretary Gomez Explains Upcoming EBSA Priorities

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.

5 Most Meaningful Provisions of SECURE 2.0

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."

A New Option for Moving Retirement Savings When Switching 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.

SECURE 2.0 Law Aims to Reconnect You With Your Long-Lost 401(k)

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.

SECURE 2.0 to expand auto enrollment

Courtney Degen, P&I Washington reporter, examines SECURE 2.0 provisions that expand the use of automatic enrollment for all newly-formed plans, starting in 2025. Degen turns to several industry observers, including David Stinnett, head of strategic retirement consulting at Vanguard Group, who states that the provision is "a very good signal from policymakers that this is the best practice that works." EBRI's Craig Copeland links the auto enrollment feature's success to auto portability and emergency savings accounts, noting that these provisions "work together with auto enrollment to alleviate potential issues," and that "you really need to have those other provisions to go with (auto enrollment) for it to be most effectively increasing retirement security."

SECURE 2.0 enshrines auto portability into law

P&I Washington reporter Brian Croce examines specific provisions of recent SECURE 2.0 legislation "codifying" auto portability and helping to create a highly-favorable environment for adoption of the new plan feature. Croce turns to industry experts, including RCH EVP Neal Ringquist and Fidelity's Sterling Ingui, head of next generation products, workplace investing. Ringquist states that the legislation "removed some potential uncertainty some of those record keepers and plans had regarding the permanence of auto portability" while Ingui adds that the provisions "will help address the long-standing problem of plan leakage in the industry."

The Big Shift Towards Auto Portability

RCH's Tom Hawkins, writing in 401k Specialist, asks readers if they've noticed the recent "big shift" towards auto portability. Hawkins writes: "[f]or those accustomed to a glacial pace of change in the world of retirement, you could be forgiven if you’ve missed two very recent, tectonic shifts toward the system-wide adoption of auto portability" that occurred in rapid succession in the fourth quarter of 2022. The formation of the Portability Services Network (PSN) in October, quickly followed by SECURE 2.0 legislation that included important auto portability provisions, were both "unprecedented actions" which Hawkins asserts will continue to reverberate in the retirement industry. "The 'big shift'", Hawkins concludes, "won't be completed overnight, but it's already well underway, and will proceed with a pace that could take many more by surprise."

Previously featured in RCH's Consolidation Corner blog

Next Major Industry Focus: Using Auto-Portability to Solve Savings Gap

Writing in NAPA Net, John Sullivan opines that, with the advent of SECURE 2.0, "preventing retirement plan “leakage” through the widespread adoption of auto-portability appears to be the next industry target now that SECURE 2.0 has passed." Sullivan expands on that legislative theme by addressing the October 2022 formation of the Portability Services Network (PSN), and turning to RCH & PSN CEO Spencer Williams, who provides an overview of PSN activities. Williams also references the "massive overlay" of auto portability's benefits for minorities, women and lower income demographics, which coincides with the goals of PSN chairman Robert L. Johnson, as well as PSN's founding recordkeepers.