Last year at this time, our firm predicted that 2022 would be a pivotal year for retirement savings portability. It turns out we were right, but we confess to being pleasantly surprised at just how consequential (and positive) the year has been, and it’s not over yet.
Here’s a rundown of key events during 2022 that have helped to positively shape the future of retirement savings portability:
Auto Portability Endorsed by NAACP, National Urban League
- In January, Robert L. Johnson, Founder and Chairman of The RLJ Companies and majority owner of Retirement Clearinghouse (RCH), announced that auto portability had secured endorsements from the NAACP and the National Urban League.
Washington, DC Embraces Auto Portability
- In February, auto portability was featured in the ERISA Advisory Council’s report – “Gaps in Retirement Savings Based on Race, Ethnicity and Gender.”
- In March, two of four witnesses highlighted the benefits of auto portability in testimony before the U.S. Senate Health, Education, Labor & Pensions (HELP) Committee, in leveling the playing field for women, minorities, and lower income workers.
- In June, the Advancing Auto Portability Act of 2022, co-sponsored by Sens. Tim Scott (R-S.C.) and Sherrod Brown (D-Ohio), was introduced. The bill would codify rules for an industrywide auto portability network and offer tax credits to plan sponsors who implement auto portability. In October, a companion bill (HR 9252) was introduced in the House by Rep. Brad Schneider (D-Illinois).
Portability Services Network Formed to Accelerate the Adoption of Auto Portability
- In October, the formation of the Portability Services Network (PSN) was announced. PSN is a consortium of workplace retirement plan recordkeepers and RCH created to accelerate the nationwide adoption of auto portability to help America’s under-served and under-saved workers improve their retirement outcomes. The consortium represents approximately 43.8 million workers across more than 48,000 employer-sponsored retirement plans.
- In December, a webinar facilitated by the Groom Law Group showcased the commitment of member recordkeepers to the success of the Portability Services Network.
What’s Ahead in 2023?
Gazing into our crystal ball, we see:
- Legislative action on auto portability, potentially prior to the 118th Congress
- Accelerated adoption of auto portability, by both large recordkeepers and their plan sponsor clients – particularly as the Portability Services Network becomes operational in Q1 2023
- Increasing awareness of the overall benefits of retirement savings portability in preserving Americans’ retirement savings, particularly for under-saved and under-served segments of our workforce.
Whatever the future may hold for retirement savings portability, I hope that each and every reader has a joyous holiday season and enjoys a safe and prosperous New Year.