It is intuitive to observe that the easiest way for a plan participant to achieve lifetime participation in the U.S. retirement system is to work for the same employer for 40 years or more. But in today’s highly mobile workforce, that rarely happens. According to the Employee Benefit Research Institute (EBRI), the average American will change jobs more than seven times during a 40-year working life, indicating that a participant’s average tenure with each employer will be a little over five years. So what can be done to help the vast majority of participants that simply won’t work for one employer for their entire careers?
Consolidation Corner Blog
Consolidation Corner is the Retirement Clearinghouse (RCH) blog, and features the latest articles and bylines from our executives, addressing important retirement savings portability topics.
In his latest MarketWatch RetireMentors column, RCH CEO Spencer Williams modifies the familiar proverb “a stitch in time saves nine” for the benefit of 401(k) savers who have multiple retirement savings accounts. A roll-in becomes the equivalent of the stitch, saving participants considerable time and money as they change jobs.
By Neal Ringquist and Tom Hawkins
As we prepare to observe National Save for Retirement Week (also known as “National Retirement Security Week”), scheduled for October 16-22, it’s a great opportunity to remember why we, as individuals, need to save for our retirement. But the sobering reality is that we are all being called upon to save retirement itself—by rescuing a retirement system that doesn’t work for millions of hardworking Americans.
In his most recent article in MarketWatch, RCH’s Spencer Williams notes the upcoming ‘National Save for Retirement Week’ event, and employs some clever word-association that has readers re-thinking the meaning of the word “save.”
This summer, there’s one topic that everyone in Washington, D.C. seems to agree upon: the importance of consolidation in protecting Americans’ retirement security.
Hey, plan sponsors: Imagine for a moment that your active participants are Tom Cruise from Mission: Impossible (or Barbara Bain, Peter Graves and Martin Landau, for those of us who remember the classic TV series).
“Make the smart decision the easiest decision” seems like an obvious goal for plan sponsors when designing participant-directed retirement plans, and it’s certainly driven the rapid adoption of the autos—auto enrollment, auto deferral escalation, and auto investment options, such as target-date funds and managed accounts.
In his most recent article in MarketWatch, "Are you still feeling luck, 401(k) saver?" RCH’s Spencer Williams reprises last year’s 7/10/15 article where he channeled Clint Eastwood’s iconic movie hero “Dirty Harry” Callahan. Just like the movie villains whose luck ran out at the hands of Dirty Harry, retirement savers who strand their 401(k) accounts must run a gauntlet of decidedly unlucky outcomes – including involuntary cashouts, automatic rollovers and savings-depleting fees.
Have you ever received a letter with the notice “Time Sensitive Material! Open Immediately!” boldly splashed across the outside of the envelope, only to sigh with disappointment with what’s on the inside? While the disappointment of false advertising so often seems to be the case with “junk mail,” the warning turns out to be true when we examine the behaviors of retirement plan participants who have recently changed jobs.