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Auto Portability - Recent Developments
Find the most-recent auto portability media coverage and developments.
401k Specialist's Brian Anderson covers the 7/27/21 announcement from Retirement Clearinghouse (RCH) that the firm has surpassed $10 billion in retirement savings consolidations. The achievement, noted Anderson, "represents a greater than threefold increase in the amount of retirement account transfers completed on behalf of American workers in just six years" and extensively quotes RCH's President & CEO Spencer Williams.
In a 7/20/21 press release, RCH announces that Renee Wilder Guerin, former Director of the Federal Thrift Savings Plan, has joined Retirement Clearinghouse (RCH) as Executive Vice President of Public Policy, with responsibility to drive support for public policy matters aiming to preserve retirement savings and increase retirement security for all Americans. Ms. Wilder Guerin will be taking over the position from Tom Johnson, who is retiring.
Writing in 401k Specialist Magazine, RCH's Tom Hawkins takes a deep dive into draft SECURE 2.0 provisions that dramatically expand the purpose, scope and scale of a Retirement Savings Lost & Found. Hawkins contends that the new provisions, as currently written, would create a massive, government-run repository of micro-balance accounts costing taxpayers millions, while failing to boost retirement security. Hawkins encourages Congress to return to an earlier Lost & Found model, while addressing the broader, small-balance account problem through policies that incentivize the adoption of auto portability.
Writing in 401k Specialist, RCH EVP Tom Johnson reports on the U.S. Senate’s Committee on Health, Education, Labor and Pensions (HELP) 5/13/21 hearing on retirement security. With testimony from a blue-ribbon panel of witnesses, the hearing had a broad focus, but the topic of retirement savings leakage, and its most-promising solution, auto portability, were prominently featured in testimony by EBRI CEO Lori Lucas, and echoed by other witnesses and Committee members.
EBRI CEO Lori Lucas, testifying on retirement security before the U.S. Senate's Health, Education, Labor and Pensions (HELP) Committee on 5/13/21, targets "reducing plan leakage" as a key policy initiative, and identifies auto portability as a solution that could dramatically lower cashout leakage levels. Lucas points to EBRI research that quantifies auto portability's projected benefits of $2.0 trillion when applied to all balances, $1.5 trillion when applied to balances less than $5,000, and its ability to significantly boost the benefits of other policy initiatives, such as open MEPs.
InvestmentNews retirement and insurance reporter Emile Halez covers testimony before the U.S. Senate Committee on Health, Education, Labor & Pensions (HELP), which convened for the first time since 2013 to discuss retirement security. Halez notes that the focus of the committee included emergency savings and student loans, but also addressed the promise of auto portability as a means to addressing excessive cashout leakage. EBRI CEO Lori Lucas carried the auto portability banner before the HELP Committee, telling the legislators that "open multiple-employer plans with automatic account portability between employers could reduce the money flowing out early from 401(k)s by an estimated 26%."
Writing in Benefits Quarterly magazine, RCH founder, president and CEO Spencer Williams examines the multi-faceted problem of "small accounts" and describes how plan sponsors, providers and recordkeepers can take proactive measures to solve the problem by adopting auto portability. By adopting auto portability, Williams contends that the improved outcomes for participants could "mitigate the risk of 401(k) fee lawsuits and other legal actions down the line."
Reporting on EBRI's release of their 31st Annual Retirement Confidence Survey (RCS), BenefitsPRO's Alan Goforth highlights the survey's key finding that "nearly nine in 10 employees with access to an employer-sponsored defined contribution plan consider auto-portability to be a valuable benefit" while observing that "those participants who stand to benefit the most from auto-portability — including minorities, younger participants and lower-income workers — want it most." Goforth quotes RCH founder, president and CEO Spencer Williams, as well as EBRI president and CEO Lori Lucas.