As PSN operations have commenced, and as the automated plan-to-plan consolidation of small balances begins, a familiar industry adoption pattern is emerging – where innovators within the plan sponsor community lead the charge and are quickly followed by others.
For plan sponsors who are still considering adopting auto portability, here are four compelling reasons why you should move now to embrace the new plan feature.
1. You Won’t Be the First
Auto portability has already been embraced by PSN, an industry-led consortium of recordkeepers with a 63% market share of defined contribution participants, and with more member recordkeepers on the way. It is truly an unprecedented industry vote of confidence in auto portability.
Auto portability has also been codified into law by SECURE 2.0, and has been subject to significant regulatory scrutiny and rule-making that clearly delineate fiduciary roles and responsibilities, while establishing clear, participant-protective guardrails.
Still, when it comes to adoption of any new plan feature, many plan sponsors tend to be somewhat risk-averse, preferring not to be early adopters, and deciding instead to wait-and-see how things pan out.
The good news for these plan sponsors is that service providers, legislators and regulators have all decisively weighed in on auto portability, and now, thousands of plan sponsors have already adopted.
It’s now safe to say that no plan sponsor will find themselves out on a limb when choosing to adopt auto portability.
2. You’ll be Acting in Your Plan’s Self-Interest
Sometimes, there’s no better way to convince would-be adopters than to examine how auto portability advances their own self-interests. Here, auto portability really delivers.
It is within the clear self-interest of plan sponsors to:
3. You’ll Increase Participants’ Prospects for a Secure & Timely Retirement
By sponsoring a defined contribution plan, employers increase the odds that their employees will enjoy a secure and timely retirement.
By improving participant outcomes, auto portability further improves those odds, and supports a plan sponsor’s commitment to their past, present and future participants.
Auto portability achieves improved participant outcomes by:
4. Your Participants Want Auto Portability
At least three surveys have revealed participants’ strong preferences for auto portability:
Make the Move
If you’ve been considering adopting auto portability, there’s no better time than now to make the move. You can start by talking to your recordkeeper. If your recordkeeper is a member of the Portability Services Network, they will be able to guide you through the adoption process. If your recordkeeper is not yet a member of PSN, let them know that you’re interested in adopting auto portability.
Either way, you’ll be taking an important step that’s squarely in the interests of your plan and your participants.