Spencer Williams

On September 2, 1974, President Gerald Ford signed the Employee Retirement Income Security Act (ERISA) into law. Since that time, ERISA has become the regulatory backbone of the retirement services industry. And on September 12, members of the industry, along with legislators, government regulators, and other private and public sector representatives, came together to celebrate ERISA’s golden anniversary in Washington, D.C. My colleagues and I were honored to be among those in attendance.

During the past several years, much progress has been made to simplify the process of enabling defined contribution plan participants to transfer their savings from one plan to another when they change jobs. These strides have been made thanks to an ongoing partnership between the private and public sectors, and between Democrats and Republicans in Congress.

In November 2023, we saw the launch of the Portability Services Network, with our nation’s leading retirement plan record-keepers—Alight Solutions, Empower, Fidelity Investments, Principal, TIAA, and Vanguard—on board as founding members. The Portability Services Network makes the digital auto portability solution a reality for helping Americans keep their retirement savings invested in the system and working for them.

On April 22, we will celebrate the 54^th annual Earth Day, which gives us the opportunity to celebrate our planet’s natural surroundings and contemplate how we can help preserve them. The advent, and ongoing expansion of recycling programs has enabled our society to reduce our waste—and although there is still quite a long way to go, we have evolved significantly from the post-World War II throwaway culture.

On the last day of 2023, a key provision of the SECURE 2.0 Act—increasing the limit on small 401(k) accounts subject to automatic rollovers into safe-harbor IRAs from $5,000 to $7,000—went into effect.

In the summer, we are used to temperatures spiking. But in addition to record-breaking temperatures and erratic weather, this summer has also brought a sharp increase in 401(k) hardship withdrawals.

Americans’ lack of retirement preparedness has long been an area of concern for our nation. But findings in a recent study underscore that, despite all of the media articles offering tips for how to save more for retirement, many Americans are still making a self-destructive decision that can leave them with less when they retire.

Knowledge is power, as the saying goes. As Americans observe another Financial Literacy Month, members of the retirement services industry have an opportunity to pause and think about how they can help empower more people to achieve a financially secure retirement.

The passage of the Securing a Strong Retirement Act of 2022 (known as “SECURE 2.0”) reinforces the bipartisan commitment in Congress to helping Americans save more for retirement. Signed into law as part of a $1.7 trillion omnibus spending bill signed by President Biden on December 29, the legislation includes a variety of provisions, including the expansion of automatic enrollment in 401(k) and 403(b) plans. Fortuitously, SECURE 2.0 measures related to auto portability come shortly after the launch of an industry initiative to make auto portability—a technology solution that can operate in tandem with auto enrollment to optimize plan participants’ retirement outcomes—much more accessible to plan sponsors across the country.

At a time when terms like “inflation,” “gas prices,” “recession,” and “volatility” dominate chatter about the U.S. economy, plan sponsors and recordkeepers are likely fielding questions and concerns from participants. Every dollar counts when saving for a financially secure retirement, especially with the present volatility in the financial markets. But while investment fund options, asset classes, and fees are important for helping participants weather inflation and save more, there is another way that sponsors and recordkeepers can help participants protect, and increase, their retirement savings in the New Year—facilitate portability.

Retired Baby Boomers who are saving for retirement through defined contribution plans like 401(k)s are drawing down their savings faster than their counterparts in previous generations who had pensions and other defined benefit plans, according to recent industry research. And on top of that, Baby Boomers who may be relying solely on their defined contribution plans may wind up with less savings for retirement than their counterparts who waited longer to withdraw savings from their defined benefit plans—and could, therefore, outlive their nest eggs.