As a co-author of the paper who has also spent a great deal of time chronicling the real‑world retirement savings challenges faced by America’s mobile workforce, I believe that this paper arrives not a moment too soon.
Its message is clear: fragmentation has cost American workers billions, and the system now has a proven solution – the clearinghouse model that already powers auto portability via the Portability Services Network (PSN).
The argument in favor of building out this clearinghouse model is simple but profound: if the retirement system is going to meet the needs of workers and effectively deliver significant new federal initiatives such as the Saver’s Match, it must begin to operate – finally – like a system, and systems require infrastructure.
Three Key Problems to Confront
The paper confronts an uncomfortable truth: while the U.S. retirement system excels at helping people save, it struggles mightily to help them keep those savings.
Three long‑standing structural problems drive the leakage.
1 - A Fragmented Ecosystem
Recordkeepers, custodians, IRA providers, and public programs all operate on different platforms. Because these systems can’t “talk” to one another, routine events – like a worker changing jobs – produce friction, and ultimately, cashouts. Millions of 401(k) accounts are either cashed out, left behind – or in the case of small balances, forced into dead-end safe harbor IRAs.
2 - A Highly Mobile Workforce
America’s workforce is constantly on the move. Job changes – 15 to 20 million annually – are the single greatest trigger for retirement savings leakage. Every move creates risk: lost accounts, stale addresses, and the proliferation of small, inactive balances. These disconnected accounts are then more likely to be cashed out during the next transition.
3 - Public Policy Focused on Accumulation, Not Preservation
Over decades, well‑intentioned public policy has succeeded in expanding access and increased participation – but has neglected the infrastructure needed to protect those savings once they’re in the system. Auto IRAs, automatic enrollment, auto escalation and other expanded access initiatives have been successful in “filling the bucket” but a huge hole at the bottom remains.
The Solution: Building Out a Clearinghouse for the Retirement System
To address these structural failures, our paper introduces a concept whose time has clearly come: a neutral, shared clearinghouse that standardizes how accounts are located, validated, moved, and reconnected across every stage of a participant’s working life.
If ERISA’s architects had foreseen the problems that we have today, they almost certainly would have built something like this 50 years ago.
Auto Portability: A Key Proof Point
The most important insight in the paper isn’t theoretical. The clearinghouse model is already operating today – successfully and at scale – through the Auto Portability Network, delivered by PSN. What was once a complex, manual, error-prone process is now fully automated, governed by a set of consistent rules, and supported by secure, interoperable APIs.
In short: auto portability works. The clearinghouse model is real. The infrastructure is now proven. More than 21,000 plans have adopted auto portability in the first two years, with the service now available to more than 6 million workers. Six major recordkeepers – representing over 60% of defined contribution plan participants – are already PSN members.
Auto portability isn’t just a service, it stands as a proof point that a clearinghouse can drive industry‑wide interoperability, reduce leakage, and improve outcomes for workers who need help the most.
The Saver’s Match Urgently Needs a Clearinghouse to Succeed
With the Saver’s Match set to go live in 2028, the urgency could not be greater.
The Saver’s Match will be the largest federal retirement savings initiative in history – projected to reach millions of low‑ and moderate‑income savers each year. But unlike a tax credit deposited into a bank account, Saver’s Match dollars must be directed into a qualified retirement plan or traditional IRA.
On an annual basis, that means millions of contributions, flowing from the U.S. Treasury into thousands of plans and hundreds of providers for a population that changes jobs frequently, often with multiple accounts and outdated information.
Without a clearinghouse, the Saver’s Match risks falling prey to the same fragmentation that has plagued small balances for decades. Our paper quantifies this risk – and then demonstrates the solution through a Saver’s Match Simulation (SMS) that models the annual flows from the Treasury to endpoints in a network, applying key elements of auto portability’s technology.
Just as PSN unifies recordkeepers for auto portability, an analogous Saver’s Match Network (SMN) would provide:
In short, the SMN would ensure that every match dollar reaches a qualified account – and stays there.
Other Essential Clearinghouse Networks:
While the case for the Saver’s Match Network is urgent due to its size and its timing, the paper characterizes two additional networks as “essential” for completion.
The Auto Locate Network is envisioned as a network query mechanism that would address the persistent problem of missing participants, enable participating entities to identify a participant’s most current and reliable address. Auto Locate queries would be distributed across a network of authorized member systems – comprising plan-based recordkeeping platforms and individual retirement accounts (IRA) to determine whether an address is associated with an active participant account, which greatly increases its probability of accuracy.
The Digital Rollover Network service would introduce new functionality specifically designed to reconnect disengaged participants with their savings. The transaction validation and secure money movement capabilities that are already operational in the Auto Portability Network service could be adapted to manage a larger account balance rollover service. In effect, the Digital Rollover Network would extend the clearinghouse model’s reach to all job-changing participants.
An Important Conclusion
Our paper closes with a point that should command immediate attention from policymakers, recordkeepers, and plan sponsors: a clearinghouse is no longer optional infrastructure. It is essential infrastructure.
If the industry acts now – pivoting off auto portability’s early success – we can create a retirement ecosystem that does what it should have done all along: protect workers’ savings as they move through their careers, not lose them along the way.
The coming months will determine whether the Saver’s Match becomes a generational wealth‑building engine – or a missed opportunity. This paper offers the blueprint for success, and more.