--- title: "First Half of 2016: A Look-Back at the Headlines Driving a New “Auto” for 401(k) Plans" description: "First Half of 2016: A Look-Back at the Headlines Driving a New “Auto” for 401(k) Plans." image: http://blog.rch1.com/hubfs/Set_Up_Images/Other_Generic_Images/2016-AP-Progress.png --- [![Retirement Clearinghouse Logo](https://blog.rch1.com/hs-fs/hubfs/raw_assets/public/Retirement_Clearinghouse_May2022/images/logo.png?width=1000&height=648&name=logo.png "Retirement Clearinghouse Logo")](https://rch1.com/) [Privacy Policy](https://securities.rch1.com/common/PrivacyStatement.pdf) [Sponsors/Service Providers](https://rch1.com/plan-sponsors) [Individuals](https://rch1.com/individuals) [Login](https://rch1.com/#) - [Home](https://rch1.com/home-page) - [Individuals](https://rch1.com/individuals) - [Individuals Home](https://rch1.com/individuals/individuals-home) - [Who is RCH?](https://rch1.com/individuals/who-is-rch) - [Why Does RCH Have My Retirement Savings?](https://rch1.com/individuals/why-does-rch-have-my-retirement-funds) - 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At the same time, Auto Portability has emerged as the only viable solution to cashout leakage, delivering portability for the small-balance (less than $5,000) job-changer, automatically moving their balances forward when they change jobs and enroll in a new plan. Let’s look-back at the first half of 2016 and see how [Auto Portability](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwjZkIL-mZTOAhWCRD4KHdPzBzgQFggcMAA&url=https%3A%2F%2Fcdn2.hubspot.net%2Fhubfs%2F467537%2FRCH_Services%2FAuto_Portability_FAQ.pdf&usg=AFQjCNGiVdU-AhB8ERkcHWrh2zABOdbBoQ&sig2=DUS9RxcvYNbymXIBfVkxjA&bvm=bv.128153897,d.cWw) may now be poised to become an “overnight success” in the not-too-distant future. **Quarter 1 / 2016: Retirement Savings Portability Goes Mainstream** Kicking off the New Year with a bang, President Barack Obama [addressed retirement savings portability](http://www.pionline.com/article/20160112/ONLINE/160119951/president-obama-calls-for-portable-retirement-savings-in-state-of-the-union-speech) in his final State of the Union address, followed by the inclusion of [specific portability initiatives in his 2017 budget](http://www.plansponsor.com/Portability-Is-Key-in-Presidents-Retirement-Initiatives/?fullstory=true). The reaction from industry players, including [DCIIA’s Lew Minsky](http://www.pionline.com/article/20160126/ONLINE/160129886/experts-weigh-in-on-obama-retirement-savings-proposal), was positive. In February, [DCIIA](http://www.dciia.org)’s Leakage Task Force released a compelling [research brief](http://c.ymcdn.com/sites/dciia.org/resource/collection/FD24CDEE-4B66-4B5A-9A08-E5C26D7FFA69/02-2016-_Research_Brief_%E2%80%93_Plan_Leakage.pdf) on Plan Leakage, highlighting data from the RCH-Boston Research Technologies Mobile Workforce Study.  The DCIIA task force took particular interest in the psychology that drives post-separation behaviors, noting the worrisome trends in the Millennial age cohort, and the need to remove “obstacles” that prevent easy transfer of balances into new plans. In March, Retirement Clearinghouse broke ground on the Auto Portability Simulation (APS) Model, working with Texas State University’s Dr. Ricki Ingalls, Ph.D. The model is a discrete event simulation, the first-of-its-kind to be applied to the nation’s retirement system, specifically addressing the outcomes that could be expected if there were system-wide adoption of Auto Portability. **Quarter 2 / 2016: Auto Portability Simulation Becomes a Game-Changer** In April, RCH continued work on the Auto Portability Simulation (APS) Model, engaging EBRI and other industry players to collaborate on key input data critical to drive the APS model’s accuracy.   On May 3rd, the [Plan Sponsor Council of America](http://www.psca.org) got a sneak-preview of APS results during an [Auto Portability session](http://www.plansponsor.com/Rethinking-Mandatory-Cash-Outs/) conducted by RCH at their National Conference in Nashville. Immediately following the PSCA event on May 5th, RCH teamed up with [LIMRA’s Secure Retirement Institute](http://www.limra.com/secureretirementinstitute/) to co-present [Making Portability Work for Participants](https://blog.rch1.com/hubfs/Presentation_Decks/LIMRA_050516_Portability.pdf).  The Auto Portability Simulation was [officially announced on May 10th](https://www.rch1.com/news-and-announcements/press-releases/dynamic-simulation-shows-auto-portability-can-add-115b-to-americans-retirement-savings-over-the-next-generation), then [unveiled to the industry](https://blog.rch1.com/blog/auto-portability-simulation-model-unveiled-at-ebri-forum) on May 12th, at the EBRI 78th Policy Forum. **The results:  system-wide adoption of Auto Portability will generate over $115 billion in new employer-plan savings for the current and next generation of retirement savers.**  Reaction to the APS was swift & positive, with coverage by [BenefitsPro](http://www.benefitspro.com/2016/05/13/orphaned-accounts-and-what-the-dol-may-have-to-rec?page=3&page_all=1&slreturn=1469544206), [Bloomberg BNA](http://www.bna.com/pension-autoportability-seen-n57982072809/) and [Retirement Income Journal](https://blog.rch1.com/hubfs/RCH_Services/RIJ_No_Acct_Left_Behind_051916.pdf) – all agreeing that important ground had been broken in defining a solution to cashout leakage for small-balance job-changers.    Revelations from the APS model were no doubt part of the conversation when Retirement Clearinghouse met with Labor Secretary Thomas Perez in late May, to discuss the status of a pending [Advisory Opinion on the use of negative consent](http://www.natlawreview.com/article/moving-toward-system-portable-benefits-gig-economy), allowing small balances to automatically follow 401(k) participants, when they change jobs.  Finally, in June the [Bipartisan Policy Center](http://bipartisanpolicy.org/) released [Securing Our Retirement Future](http://bipartisanpolicy.org/library/retirement-security/), an excellent report that recommended the adoption of processes that enable the seamless transfer of retirement savings between defined contribution plans when participants change jobs. The BPS also specifically recommended the establishment of a “nationwide private-sector retirement security clearinghouse” – a concept that Retirement Clearinghouse obviously [applauds](https://www.rch1.com/bipartisan-policy-center-calls-for-improved-portability-to-curb-cashout-leakage)!  **What’s Next?** While we don’t have a crystal ball, we do believe that the second half of 2016 will bring important advancement towards the goal of retirement savings portability, including: - Continued refinement of the Auto Portability Simulation model - An Advisory Opinion from the Department of Labor on the use of negative consent for small balance roll ins - Increased awareness of the leakage problem as well as focus on retirement savings portability as a solution [Back](https://blog.rch1.com/blog) [![Retirement Clearinghouse An RLJ Company](https://blog.rch1.com/hs-fs/hubfs/raw_assets/public/Retirement_Clearinghouse_May2022/images/footer_logo.png?width=1000&height=648&name=footer_logo.png "Retirement Clearinghouse An RLJ Company")](https://rch1.com/) 1916 Ayrsley Town Boulevard Suite 200 Charlotte, NC 28273 - [Individuals](https://rch1.com/individuals) - [Plan Sponsors](https://rch1.com/plan-sponsors) - [Auto Portability](https://rch1.com/auto-portability) - [Company](https://rch1.com/company) - [News & Information](https://rch1.com/news) - [Mission](https://rch1.com/company/mission) - [Careers](https://rch1.com/company/careers) - [Contact Us](https://rch1.com/contact-us) - [Logins](https://rch1.com/#) - [Disclosure Central](https://rch1.com/individuals/learning-center/resources-%26-downloads) - [Do Not Sell or Share](https://blog.rch1.com/blog/first-half-of-2016-a-look-back-at-the-headlines-driving-a-new-auto-for-401k-plans#decline-cookies) - [My Personal Information](https://blog.rch1.com/blog/first-half-of-2016-a-look-back-at-the-headlines-driving-a-new-auto-for-401k-plans#decline-cookies) - - - Individuals should consult their tax advisers or legal counsel for advice and information concerning their particular situation. 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