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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.


Oct
12
2020

If Timothy Leary Were a 401(k) Plan Sponsor

If Timothy Leary Were a 401(k) Plan SponsorIn the 1960’s, counter-culture guru Timothy Leary urged a generation to “turn on, tune in and drop out.” It’s probably a good thing that I didn’t take his advice….at least not the “drop out” part! 
 

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Oct
05
2020

The Explosion of Small-Balance IRAs

small_IRA_accountsBased on solid research, we’ve long known that typical automatic rollover IRAs result in high levels of cashout leakage. We’ve also suspected that they’ve contributed to an explosion of small-balance IRAs.
 

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Sep
29
2020

From Tired to Inspired: A Roadmap for 401(k) Roll-Ins

Roll-In RoadmapAs I wrote in a previous article, 401(k) automated portability is an idea whose time has come. To achieve that vision, how will we get from the present state to full automation of the plan-to-plan roll-in process? 

This article, as well as the video below, offers readers a roadmap for the progression from ‘tired’ to ‘wired’ and finally, to the ‘inspired’ state that will eventually characterize 401(k) roll-ins.

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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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Sep
16
2020

Automated 401(k) Portability: An Idea Whose Time Has Come

Nothing is More PowerfulFrench author and poet Victor Hugo observed: “nothing is more powerful than an idea whose time has come.”

In theory at least, plan-to-plan portability has always been a feature of our 401(k) system. In practice, it’s been completely impractical for all but a hardy few. The idea of automating 401(k) portability was the holy grail, a ‘moonshot’ generally believed to be impossible…until now.

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Sep
02
2020

401(k) Plan Terminations Could Produce New Wave of Cashout Leakage

401k_Plans_Cashout_LeakageDuring the COVID-19 crisis, massive job losses combined with economic hardship and relaxed restrictions on withdrawals have created the conditions for a perfect storm of 401(k) cashout leakage. Unfortunately, this storm may soon gain more strength, when a surge in end-of-year 401(k) plan terminations could trigger a new flood of cashouts, as participants are forced to leave their former employers’ plans.

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Aug
24
2020

It’s The Final Countdown for 2020 401(k) Plan Terminations

Term_plan_final_countdown_2020As we enter the 4th quarter of 2020, many plan sponsors – for a variety of reasons – are faced with the prospect of a 401(k) plan termination.  For most, this will be the first -- and only -- time that they’ll undertake this important project. 

If you’re facing a plan termination in the 2020 calendar year, time is not on your side.  A properly-conducted plan termination can take up to 2-3 months from start-to-finish, and requires significant planning, flawless execution and lots of attention to detail. 

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Aug
17
2020

‘Sudden Money’ and Preserving 401(k) Savings Don’t Mix

sudden moneyResearchers realize that long-term retirement planning is not a natural act for most 401(k) plan participants. Consequently, important 401(k) plan features have evolved (ex. – auto enrollment, auto escalation, QDIA funds, etc.) to overcome the mis-match and to promote saving for retirement. Many of these features work spectacularly well – but only for as long as participants are actively participating in that plan.

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Aug
11
2020

The Tragicomedy of Cashout Leakage

TragicomedyI often write about the phenomenon of cashout leakage, which occurs when participants change jobs and prematurely withdraw their retirement savings, prior to normal retirement age.

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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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