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Auto Portability - Recent Developments
Find the most-recent auto portability media coverage and developments.
The PLANSPONSOR writing team of Natalie Lin and Remy Samuels tackle a big development in the DC recordkeeping world, when on 7/6/23, Principal announced that it was joining with the Portability Services Network (PSN), an industry-led utility dedicated to the adoption of auto portability. The pair writes: "[t]he addition of Principal means the country’s five largest recordkeepers by assets are now part of the network, with Principal joining Fidelity Investments, Empower, Vanguard and Alight Solutions, according to the latest ranking by PLANSPONSOR."
401k Specialist Editor-in-Chief Brian Anderson covers the 7/6/23 announcement by Principal that it has joined the Portability Services Network -- a "consortium of retirement plan service providers focused on helping America’s under-served and under-saved workers improve their retirement outcomes by making it easier to transfer their workplace retirement accounts when changing employers." With the move, reports Anderson, "Principal becomes a board member and one of seven owning members of PSN, which utilizes the auto-portability solution created by Retirement Clearinghouse."
NAPA Net's John Sullivan notes that "the movement to auto-portability continued to grow" as Principal announced it had joined with 5 other large recordkeepers and Retirement Clearinghouse (RCH), becoming one of the seven owning members of the Portability Services Network (PSN), launched in October 2022. In his piece, Sullivan quotes Robert Johnson, RCH and PSN chairman, who lauds Principal's "leadership, action, and progress to increase financial access and inclusion [that] will help more people benefit from auto-portability – in particular people of color, lower-income workers, and women, who have higher than average cash-out rates.”
PlanAdviser's Natalie Lin breaks down the 7/6/23 announcement by Principal that it has joined the Portability Services Network (PSN), "a consortium of retirement plan service providers seeking to help workers with lower balances transfer their workplace retirement accounts when changing employers." Lin notes that "[t]he addition of Principal means the country’s five largest recordkeepers by assets are now part of the network."
PRESS RELEASE: Principal® joins industry consortium to support automatic portability of U.S. retirement accounts
(DES MOINES, Iowa) – Principal Financial Group® today announced it joined the Portability Services Network, LLC (PSN), a consortium of retirement plan service providers focused on helping America's under-served and under-saved workers improve their retirement outcomes by making it easier to transfer their workplace retirement accounts when changing employers. Principal® is a board member and one of seven owning members of PSN, which utilizes the auto portability solution created by Retirement Clearinghouse, LLC (RCH).
Read the entire press release here.
The 401kWire's Neil Anderson interviews TIAA spokesperson Lizzie Anderson, who explains why TIAA elected to join the Portability Services Network as the fifth recordkeeping member. Anderson placed the move in the context of closing the retirement savings gap, and indicated that "this industry consortium enabling auto portability is an important step toward helping more Americans hold on to their money during their professional journeys." Anderson also cited EBRI and RCH data indicating the prevalence of job-changing and the lack of seamless plan-to-plan savings portability as key factors driving the need for auto portability.
Writing for Georgetown University's Center for Retirement Initiatives (CRI), retirement and investment expert Catherine Reilly assesses the impact of recent policy reforms, including the passage of the SECURE 2.0 Act in December 2022, which "provide an opportunity to significantly improve retirement savings portability to the benefit of participants, employers, and retirement plan providers." Reilly notes the pitfalls facing retirement savers trying to build wealth, including the difficulties in consolidating multiple retirement savings accounts, which increases the prevalence of cashing out. Reilly notes the formation of the industry-led Portability Services Network, along with provisions of SECURE 2.0 that provide a safe harbor for adopting auto portability, and concludes with a call-to-action, writing: "Now is the time for the U.S. to get it done. Facilitating portability and account consolidation are two of the most important ways to boost retirement savings and enhance the effectiveness of current and future policy reforms."
Writing in the weekly Corporate Roundup feature for 401k Specialist, Amanda Umpierrez recaps the 4/4/23 announcement from TIAA that it is joining the Portability Services Network (PSN), an industry-led consortium of recordkeepers formed to accelerate the adoption of auto portability. Umpierrez includes quotes from Thasunda Brown Duckett, president & CEO of TIAA, as well as RLJ Companies, PSN and RCH Chairman Robert L. Johnson.