Consolidation Corner

March 30th Washington DC Forum to Showcase Retirement Plan Portability & Public Policy

Posted by Thomas Johnson on Mar 23, 2017 6:34:27 AM

 

An upcoming event in Washington, DC, to be held on March 30th and hosted by the Financial Services Roundtable, promises to be both highly-interesting and informative, addressing the very latest in retirement plan portability research and development.

 

The event, Retirement Plan Portability & Public Policy: Unlocking the potential in portability, will take place at the Financial Services Roundtable’s headquarters [map] from 10:30 a.m. to Noon, and is free to attend. To register, click here. Click here to view a full agenda.

 

The event features an all-star lineup of presenters, including:

 

Key topics include:

  • New research by the Employee Benefit Research Institute (EBRI) on the overall benefits of portability to America’s defined contribution system
  • The latest on Auto Portability, including:
    • Auto Portability Explained
    • The Auto Portability Advisory Opinion
    • An Auto Portability Progress Report
    • Auto Portability & the Future of Portability
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Topics: Auto Portability, 401(k) Consolidation, Plan Portability, America's Mobile Workforce, Retirement Plan Portability, Financial Services Roundtable

The Stealth Solution to America’s Retirement Savings Crisis

Posted by Neal Ringquist on Mar 14, 2017 8:30:00 AM

 

Over the past year, the Department of Labor’s Fiduciary Rule has been highly-visible, presenting major ramifications for the retirement industry and looming large on the radar screens of retirement services providers.  

 

The underlying rationale for the rule, as stated by the Obama administration in an April 6, 2016 press briefing, was to save retirement investors $17 billion per year in lost retirement savings that result from conflicts of interest in retirement advice. Certainly, anything that protects $17 billion in retirement savings is a worthy goal, if it helps more Americans meet their retirement income needs.

 

However, there’s a larger hole in our retirement system – cash-out leakage – that inflicts far greater harm to American retirement savers, yet this threat continues to fly beneath our collective radar.   

 

Read More

Topics: Auto Portability, Mandatory Distributions, Automatic Rollovers, 401(k) Consolidation, Cash Outs, Auto Enrollment, Automatic Rollover

The Fundamentals of Locating Missing Participants

Posted by Thomas Hawkins on Mar 8, 2017 10:41:38 AM

This video presentation is designed to give the viewer a basic understanding of the principles of locating missing participants in 401(k) plans.

 

The video addresses the following key questions that plan sponsors have regarding the issue of locating missing participants:

  • What is a missing participant?
  • What causes missing participants?
  • Why is it important to locate missing participants?
  • What are the best practices for locating missing participants?
  • What should I look for in a missing participant locator service?

 

Read More

Topics: Missing Participants, Lost Participants

Auto Portability Helps Everybody, and Hurts Nobody

Posted by Spencer Williams on Mar 2, 2017 8:24:27 AM

 


“So, whose ox are you goring with auto portability?”

 

This is what a senior, well-respected retirement policy official asked my team at a sit-down meeting in Washington, D.C. Over the course of her long career, she had heard innumerable proposals to correct the savings shortfall in the U.S. retirement system. Many of them had a downside for at least one constituency in the retirement services universe, and she assumed that auto portability had one too.


But after a bit of thought we answered, confidently and correctly, “No one’s ox.”


She couldn’t believe it, but auto portability—the routine, standardized and automated movement of a retirement plan participant’s 401(k) savings account from their former employer’s plan to an active account in their current employer’s plan—can help more Americans increase their retirement savings, and empower more sponsors to improve their plan performance metrics, without harming anyone.


And best of all, it can be implemented across the entire retirement system voluntarily, with little cost—and significant upside—to the private sector.

Read More

Topics: EBN, Auto Portability, 401(k) Consolidation, Retirement Plan Portability, Retirement Savings Portability

Big Changes Coming for Small 401(k) Accounts

Posted by Thomas Hawkins on Feb 27, 2017 10:27:59 AM

 

The pace of change in today’s world is faster than ever -- and accelerating.  Consider the vast change witnessed by today’s centenarians over the course of their lives – moving from the horse-and-buggy to aviation, moon landings, the Internet and smartphones.

 

However, changes to America’s retirement system seem to unfold more slowly – sometimes moving at “the speed of retirement” – a glacial process driven by the moribund pace of legislation, further establishment of rules by regulatory agencies, the delivery of new features by service providers, eventual adoption by the plan sponsor community, and finally – by the individual actions of participants over the course of their working lives. 

 

Even truly transformative change, such as automatic enrollment and default investments such as target-date funds, took years to germinate before legislative action, in the form of the Pension Protection Act, provided the clarity that gave their adoption a needed jump start.

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Topics: Auto Portability, Safe Harbor IRA, Automatic Rollovers, Cash Outs, America's Mobile Workforce, Boston Research Technologies, Automatic Rollover, auto portability simulation

Incubate Small Retirement Accounts, Don’t Throw Them Away

Posted by Neal Ringquist on Feb 16, 2017 11:30:00 AM

 

On February 3rd, the U.S. Chamber of Commerce, the world’s largest business federation representing the interests of more than 3 million businesses, released Securing America’s Retirement, their legislative roadmap aimed at strengthening the U.S. retirement system.

 

The Chamber’s goals are admirable:

“To address the needs of our nation’s shifting workforce, reduce barriers small businesses face in developing retirement plans, and make it easier for all Americans to save for their future…” 

 

The roadmap details policy solution proposals that Congress can act upon to achieve better retirement security for workers in the small business sector.  Improving retirement security for the small business sector is sorely-needed, as only 14% of companies with less than 100 employees – representing 34% of private sector payrolls -- offer their employees access to a retirement plan.  

 

In general, the majority of the Chamber’s agenda should be well-received, and appears to be well-vetted.  However, one policy proposal – increasing the mandatory cash-out limit to $10,000 – could have significant, unintended and adverse consequences for retirement security, if implemented without additional safeguards. 

Read More

Topics: Auto Portability, Mandatory Distributions, Automatic Rollovers, 401(k) Consolidation, Cash Outs, Auto Enrollment, Automatic Rollover

Uncashed Distribution Checks: An Ounce of Prevention is Worth a Pound of Cure

Posted by Thomas Hawkins on Feb 9, 2017 2:17:10 PM

 

Now that we’re in the thick of flu season, we’re reminded of Ben Franklin’s famous axiom: “an ounce of prevention is worth a pound of cure.”  A yearly flu shot is perhaps the best example of an effective, preventative action you can take to minimize your odds of catching the flu, and keep you breathing more easily than those who haven’t.

 

Similarly, retirement plan sponsors can take preventative steps to minimize the incidence of uncashed distribution checks, as well as to resolve the situations that inevitably occur.

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Topics: Uncashed Check Services, Stale Dated Checks, Uncashed Distribution Checks

One Small Improvement for 401(k) Plans, One Giant Leap for Retirement Readiness

Posted by Neal Ringquist on Feb 2, 2017 6:31:28 PM

Baby boomers will never forget Neil Armstrong’s famous quote in 1969, after becoming the first human being to set foot on the moon:

“That’s one small step for (a) man, one giant leap for mankind.”


Today, America faces a different, more down-to-earth challenge: delivering our citizens a comfortable and timely retirement. And similar to the moon landing – a ‘small step’ in the right direction can have a huge impact on the course of our lives.


A Focus on 401(k) Plan Deficiencies

At no time has our retirement challenge been more evident than during the first few weeks of 2017, with multiple articles pointing out deficiencies of 401(k) plans as the primary vehicle for retirement savings.

Much of the focus for improving the 401(k) system has been on increasing participation, and statistics indicate that this concern is well-founded. Unfortunately, scant attention has been paid to plugging retirement plan leakage, particularly cash out leakage – a problem that drains our retirement system of billions of dollars annually.

There is one solution – auto portability – that has the potential to plug cash out leakage and increase 401(k) plan participation. If fully implemented, auto portability could drive significant improvements in our nation’s retirement readiness. And unlike a manned mission to the moon, auto portability can be delivered by the private sector, at no cost to the American taxpayer.

Read More

Topics: Auto Portability, 401(k) Consolidation

Auto Portability Simulation (APS)

Posted by Spencer Williams on Jan 24, 2017 1:44:02 PM

 

This video presentation is designed to give the viewer a basic understanding of the Auto Portability Simulation (APS), which models the operation and benefits of Auto Portability.

 

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Topics: Auto Portability, RCH Services

How to Remove 'Friction' from the 401(k) System

Posted by Thomas Hawkins on Jan 24, 2017 8:10:00 AM



In consolidated testimony before the ERISA Advisory Council  on the topic of Participant Plan Transfers and Account Consolidation for the Advancement of Lifetime Plan Participation, EBRI’s Craig Copeland and Retirement Clearinghouse’s Tom Johnson presented “Auto Portability Research & Simulation: Automating Plan-to-Plan Transfers for Small Accounts” – providing the Council with the latest information & research on Auto Portability, as well as describing the present state of plan-to-plan transfers (“roll-ins”).

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Topics: Auto Portability, 401(k) Consolidation, Managed Portability, Roll-In, Retirement Savings Portability

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