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Auto Portability - Recent Developments
Find the most-recent auto portability media coverage and developments.
PlanAdviser's Rebecca Moore details the DOL’s 11/7/18 notice of a proposed exemption from restrictions of the Employee Retirement Income Security Act (ERISA) to RCH for use of its auto-portability solution. The DOL, says Moore, has “tentatively determined that the proposed exemption is protective of affected plan participants” and notes initial results of the use auto-portability at a plan sponsor, as well as previous support from Congressional legislators, including U.S. Senator Tim Scott, R-S.C.
PLANSPONSOR’s Rebecca Moore details the DOL’s 11/7/18 notice of a proposed exemption from restrictions of the Employee Retirement Income Security Act (ERISA) to RCH for use of its auto-portability solution. The DOL, says Moore, has “tentatively determined that the proposed exemption is protective of affected plan participants” and notes initial results of the use auto-portability at a plan sponsor, as well as previous support from Congressional legislators, including U.S. Senator Tim Scott, R-S.C.
InvestmentNews reporter Greg Iacurci reports on the Department of Labor’s 11/7/18 proposed exemption for RCH “that’s meant to stanch the flow of money out of 401(k) plans, an issue that has long troubled retirement policymakers.” Iacurci notes policymaker concerns about 401(k) leakage, and cites research from the GAO, the Center for Retirement Research at Boston College (CRR) as well as supportive comments from Marcia Wagner, principal at The Wagner Law Group. RCH, notes Iarcurci, needs the exemption in order to receive a transfer fee, absent an individual’s consent.
The 401kSpecialist’s Jessa Claeys notes the DOL’s 11/7/18 Employee Benefit Security Administration (EBSA) request for public comment on RCH’s proposed exemption, and advises her readers to comment, if they have strong opinions. The DOL’s exemption, says Claeys, would excuse RCH from ERISA and IRC rules that don’t allow sponsors or fiduciaries to use plan or employee assets for moving a former employee’s retirement savings forward, into their current-employer’s plan.
NAPA Net’s Ted Godbout informs his readership about the Labor Department’s 11/7/18 request for public comment on an auto-portability program, and notes the DOL’s Employee Benefit Security Administration (EBSA) announcement of a notice of proposed exemption for RCH from restrictions that “would allow the firm to move forward with its auto-portability program.” Godbout goes on to cite the broad-based support for auto-portability, including bipartisan political support for a DOL Advisory Opinion on auto-portability, and research by EBRI. Finally, Godbout quotes RCH President/CEO Spencer Williams on key job-changer statistics.
In the August/September 2018 print edition of PLANSPONSOR, Editor-in-Chief Allison Cooke Mintzer addresses the problem of 401(k) cashouts, highlighting the need for consolidation via auto portability in her Insights column piece entitled "Making the Most of Savings: Is your plan designed to allow for employees to roll in their assets from a former plan?" Cooke Mintzer suggests to her plan sponsor audience that helping participants aggregate assets should "be near the top of your priority list, alongside the recent industry focus on financial wellness and debt management." Cooke Mintzer also cites statistics provided by RCH CEO Spencer Williams, noting the dramatic decrease in cashouts that occurs as balance levels rise above $20,000.
In their October 11, 2018 article in BenefitsPRO, RCH's Spencer Williams and Tom Hawkins address an important retirement public policy question: How would a pairing of auto portability with open multiple employer plans (or “open MEPs”) impact the retirement savings of America’s minorities, and particularly, African-Americans? The RCH analysis found that expanded access initiatives, such as open MEPs, could serve as a catalyst to increase minority participation in employer-sponsored 401(k) plans, but could fall short in preserving minorities' retirement savings. When combined with auto portability, open MEPs could generate far more wealth at retirement, and deliver greater retirement security for minorities.
In her October 10th, 2018 article "Don't Let a 'Leaky' 401(k) Mess Up Your Retirement" Barron's reporter Reshma Kapadia examines the problem of 401(k) cashout leakage. Kapadia cites recent research by Retirement Clearinghouse, which explores the impact on minority savers of pairing savings preservation (via auto portability) with the open MEPs expanded access initiative.