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Auto Portability - Recent Developments
Find the most-recent auto portability media coverage and developments.
Following on to the 2013 study by Boston Research Group (now Boston Research Technologies), a new study released by Retirement Clearinghouse (RCH) revisits a mega plan sponsor’s ongoing experience with a program of 401(k) retirement savings portability, and finds that not only have the benefits of the original program persisted, they’ve grown, with plan participants continuing to realize significant, measurable benefits.
In their survey Hot Topics in Retirement and Financial Wellbeing 2021, Alight Solutions finds that "the majority of employers are interested in a clearinghouse service that will automatically roll balances from one employer’s DC plan to another employer’s plan when individuals change jobs."
In a Senate Finance subcommittee hearing held on 12/9/20 (Investigating Challenges to American Retirement Security) expert witness Michael P. Kreps offered testimony highlighting the problem of cashout leakage and pointing to auto portability as a near-term solution for "millions of plan participants early next year." Following Kreps testimony, strong bipartisan support for auto portability was voiced by Sen. Sherrod Brown (D-OH), Sen. James Lankford (R-OK) and Sen. Catherine Cortez-Masto (D-NV).
The Editorial Staff of the Retirement Income Journal reports on the recent announcement that John C. Malone, chairman of Liberty Media Group, has taken a minority ownership stake in RCH, which is majority-owned by Robert L. Johnson, chairman of The RLJ Companies. The authors state that Malone made the investment after becoming "convinced...of the importance of reducing leakage from qualified plans." The article also notes that the investment comes on the heels of RCH's previous announcement that Alight Solutions will lead the nationwide launch of the RCH Auto Portability Program, and will serve to address the problem of cashout leakage that occurs disproportionately among Black and Hispanic workers.
Black Enterprise's Jeffrey McKinney examines the "reconnection" between "serial entrepreneur Robert Johnson and media mogul John Malone" -- taking the form of a minority stake investment by Malone in Retirement Clearinghouse (RCH). In the piece, Malone cites RCH's 401(k) auto portability as the kind of practical "inclusive capitalism" that motivated his action. McKinney cites Johnson's economic activism and quotes Johnson, who states that the pair "have a long history of taking on big challenges" and with Malone's guidance, will "do our part to close the wealth gap for America's minority communities."
PlanAdviser's Lee Barney reports on the 11/17/20 EBRI webinar (Big Challenges with Small IRAs), which shed light on the growing problem of small balance IRAs, largely fueled by safe harbor IRAs. Presenting EBRI's recent research, Craig Copeland characterized the problem as "very pervasive." Barney quotes RCH's President & CEO Spencer Williams, who cites job-changer and cashout statistics, and points to small balance account issues as the reason that RCH created auto portability, stating: “[t]his is a solution that attempts to take advantage of inertia to create better behaviors and outcomes.”
PRESS RELEASE - John Malone Partners with Bob Johnson to Help Minorities Increase Retirement Savings
Citing a “meeting of like minds,” John C. Malone, Chairman of Liberty Media Group, and Robert L. Johnson, Chairman of the RLJ Companies and the majority owner of Retirement Clearinghouse LLC (RCH), announced today that Mr. Malone has purchased a minority stake in RCH.
On Wednesday, 11/4/20 the Broadcast Retirement Network’s Jeff Snyder interviewed Retirement Clearinghouse (RCH) President & CEO Spencer Williams and Alight Solutions’ Vice President & Head of Research Rob Austin to address the 401(k) system’s small account problem – where high levels of cashout leakage in small balance segments perennially robs millions of participants of a timely or comfortable retirement. Snyder walks Williams and Austin through an interesting and informative interview that examines the problem of small-balance cashout leakage, reveals new research insights and highlights the new "automatic" feature -- auto portability -- that delivers an effective solution.