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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.


Sep
17
2020

Every Dollar Counts in Today’s Zero-Interest-Rate Environment

ebn logoIt’s no secret that interest rates have been at historically low levels for quite some time, but the recent announcement by Federal Reserve Chairman Jerome Powell indicates that rates will stay near zero for the foreseeable future. Chairman Powell stated in his address last month that the Fed would tolerate above-2% inflation instead of attempting to preemptively control inflation by raising interest rates.

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Aug
06
2020

How to Mitigate COVID-19’s Potentially Catastrophic Impact on Americans’ Retirement Readiness

ebn logoIt’s bad enough that more than 50 million Americans have filed claims for unemployment benefits since the start of the COVID-19 pandemic and lockdown. But in addition to the disruption, financial hardship, and uncertainty that unemployed Americans (and their families) are experiencing right now, this crisis also threatens their financial security during retirement.

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Jun
02
2020

COVID-19 Pandemic Demonstrates the Need for Institutionalized Portability

ebn logoThe COVID-19 crisis has created a situation where tens of millions of American workers are in danger of seeing their retirement savings depleted. In addition to the awful death toll, the COVID-19 outbreak has led to extreme disruption in daily life, financial markets, and the economy—especially employment. As of May 28, more than 40 million Americans filed claims for unemployment benefits in the previous 10 weeks. This deadly combination of 1) levels of unemployment not seen since the Great Depression, 2) a significant market downturn, and 3) the ongoing plan-to-plan portability gap, has serious implications for these Americans’ retirement outcomes.

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Apr
20
2020

To Show Participants You Care, Help Them Avoid Cashing Out Post-CARES Act

ebn logoIt goes without saying that we are not living in normal times. The health and safety of our families and communities are paramount, and measures to ease burdens and hardships are always appreciated. These include the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the massive fiscal stimulus signed into law on March 27, 2020.

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Mar
30
2020

Think Twice Before Tapping Your 401(k) for Short-Term Needs

Wall Street JournalIn extraordinary times like these, it is understandable that Americans need emergency cash injections to pay expenses. But before tapping their 401(k)s, workers should at least follow the advice offered by the old saying “think twice,” and consider all sources of short-term cash, before prematurely cashing out their 401(k) savings (WSJ: “The Emergency 401(k) Button,” March 20). Even if tax and other penalties on 401(k) cash-outs during this period are waived, Americans who cash out forfeit the additional savings which the sums they receive would have accrued by retirement, had they remained incubated in the U.S. retirement system.

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Mar
16
2020

The Institutionalization of Portability is Key to Reducing Cash-Out Leakage

Employee Benefit News LogoAlthough defined contribution plan recordkeepers and sponsors have made considerable progress helping participants retain savings through reduced fees over the past decade, job-changing participants’ 401(k) savings account balances remain in a state of dangerous limbo, as participants often succumb to the temptation of cashing out. EBRI reports that at least 4.5 million—or 40%—of job-changing participants cash out $92.4 billion in 401(k) savings from the U.S. retirement system every year.

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Feb
25
2020

New Research Confirms Clear Shift Towards Plan-to-Plan Portability

Shift New Research Confirms Clear Shift Towards Plan-to-Plan PortabilityIncreasingly, 401(k) plans have become more-and-more “institutionalized” – reflected by an increased level of sophistication in investment options, coupled with a downward trend in fees. 

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Feb
20
2020

Video: Is Auto Portability the Next 401(k) ‘ESG’ Initiative?

Is Auto Portability the Next 401(k) ‘ESG’ Initiative?

Three recent developments indicate that the retirement industry is waking up to the need to address 401(k) cashout leakage, and importantly – from within the framework of corporate social responsibility.

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Feb
10
2020

How Socially Responsible Corporations Will Solve the 401(k) Cashout Crisis

RetirementSavingsEvery year a silent, slow-motion train wreck occurs in America’s 401(k) system, when millions of job-changing workers prematurely cash out billions of dollars in retirement savings, a phenomenon known in retirement industry lingo as “cashout leakage."
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Feb
05
2020

How Sponsors can Help Minorities Save More for Retirement

Employee Benefit News LogoEvery year, our nation’s retirement system loses $92 billion in savings because 401(k) plan participants prematurely cash out their accounts when they change jobs. This is the most recent estimate from the Employee Benefit Research Institute (EBRI), and while this finding affects all American workers, minorities are hit hardest.
 

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