Auto Portability - Recent Developments
Find the most-recent auto portability media coverage and developments.
Far Out: What If Timothy Leary Was a 401k Plan Sponsor?
In the 1960’s, counter-culture guru Timothy Leary urged a generation to “turn on, tune in and drop out.” If Leary was still around and sponsoring a 401(k) plan, he might urge participants to “save up, move on and cash out.” While that sounds contradictory and profoundly ill-advised, it’s exactly what 5 million job-changing 401(k) participants do in the 1st year following separation. In his latest opinion piece in 401k Specialist Magazine, RCH's Tom Hawkins explores the reasons for so many cashouts, and how – with viable solutions now available – plan sponsors should fully-embrace seamless plan-to-plan portability.
Every dollar counts in today’s zero-interest-rate environment
In his latest article for Employee Benefit News, RCH President & CEO Spencer Williams analyzes the phenomenon of low interest rates and its long-term effects on retirement savers. Williams observes that, in a low interest rate environment, more savings are required to generate an equivalent amount of retirement income, so avoiding unnecessary cashout leakage is paramount. To achieve this goal, Williams urges plan sponsors to adopt auto portability, a technology solution that's "available to help sponsors make every dollar count for participants during these extraordinary times."
Alight Solutions Releases New Study on Small-Balance Cashouts
Alight Solutions, a leader in defined contribution plan services, released a new study that addresses the problem of small-balance 401(k) cashouts. The study, The impact of 401(k) cash-outs on retirement income, examines the very high prevalence of small-balance 401(k) cashouts, the low incidence of 401(k) roll-ins and provides illustrations that depict the importance of preserving these small balances for retirement. Finally, the study points to RCH Auto Portability as an important "emerging new tool" in the fight against cashouts, for which Alight is "pleased to be an early adopter."
How to Handle the Explosion of Small-Balance IRAs
In his opinion piece in 401k Specialist Magazine, RCH's Tom Hawkins examines EBRI's 10/1/20 Fast Facts - Losing Ground Safely: Small IRAs’ Large Stake in Money - which provides new insight into the magnitude of a small-balance IRA “explosion” fueled by automatic rollovers, as well as the sub-optimal retirement outcomes they produce. EBRI's new information provides yet another data point in favor of 401(k) consolidation via auto portability and could serve to inform future regulatory guidance by expanding auto portability’s mandate to consolidate these previously “stranded” safe harbor IRAs back into our 401(k) system.
From Tired to Inspired: A Roadmap for 401k Roll-ins
In his latest article in 401k Specialist Magazine, RCH's Tom Hawkins walks readers through a "roadmap" for the progression of 401(k) roll-ins from ‘tired’ to ‘wired’ and finally, to the ‘inspired’ state that will eventually characterize 401(k) plan-to-plan portability. The article also includes a video providing viewers with the essential points made in the piece.
Automated 401k Portability: An Idea Whose Time Has Come
Writing in 401k Specialist, RCH's Tom Hawkins examines the vital importance of automation in transforming 401(k) portability from an impractical “great idea” into a reality – and not just for small-balance participants, but eventually for the entire 401(k) ecosystem – including participants, plan sponsors and their service providers.
Why ‘Sudden Money’ and Preserving 401k Assets Don’t Mix
Writing in 401k Specialist, Tom Hawkins establishes a strong link between the phenomenon of ‘sudden money’ – where a financial windfall can result in ruinous decisions – and the problem of unnecessary 401(k) cashout leakage. 401(k) plan features that encourage active plan participants to amass long-term retirement savings are a big success, but fail following a job change, when separated participants view their former employer’s balance as a financial windfall. To address the scourge of sudden money and its attendant cashout leakage, Hawkins examines 3 ‘faux’ solutions that fall short, and recommends the application of clearinghouse principles to effectively solve the problem.
Fintech Firm Announces $4 Million Expansion in Charlotte
In their "Five Things to Know" weekly update, the Queen City Nerve reports on the news that RCH will be "adding 300 new employees and investing more than $4 million to expand their headquarters and corporate office in Charlotte." The segment also mentions RCH new office in the Ayrsley development in the Steele Creek community, and references the market potential of auto portability, estimated by EBRI to generate an additional $2 trillion in retirement savings.
1916 Ayrsley Town Boulevard