Consolidation Corner Blog
Consolidation Corner is the Retirement Clearinghouse (RCH) blog, and features the latest articles and bylines from our executives, addressing important retirement savings portability topics.
The Auto Portability Imperative
The Most Promising Policies to Reduce 401(k) Cashout Leakage
Cashout leakage, a long-standing problem in America’s defined contribution system, is a silent crisis that unnecessarily robs millions of Americans of a comfortable, timely or secure retirement. Plagued by misunderstanding and neglect, it’s vitally important to understand the problem and to take decisive action to curb it. The fourth of a five-part series, this article addresses policies with the most promise to reduce the 401(k) cashout leakage problem.Cash-Out Leakage is Still Too High—and Auto Portability can Help
401(k) account cash-outs remain a potent threat to Americans’ retirement-readiness and by all accounts the U.S. Department of Labor agrees, having issued its final Prohibited Transaction Exemption (PTE) for auto portability at the end of July.
The Magnitude of the 401(k) Cashout Leakage Problem
Cashout leakage, a long-standing problem in America’s defined contribution system, is a silent crisis that unnecessarily robs millions of Americans of a comfortable, timely or secure retirement. Plagued by misunderstanding and neglect, it’s vitally important to understand the problem and to take decisive action to curb it. The third of a five-part series, this article addresses the magnitude of the 401(k) cashout leakage problem.
The Safe-Harbor IRA: Friend or Foe?
Automatic rollovers of small, stranded 401(k) savings accounts are, on the surface, helpful for plan sponsors to keep their plans lean and healthy. However, “on the surface” is the key part of the previous sentence.
An Important Milestone: The DOL Issues Final Prohibited Transaction Exemption for Auto Portability
On July 31st, the U.S. Department of Labor (DOL) released the final Prohibited Transaction Exemption (PTE) to Retirement Clearinghouse (RCH) for the RCH Auto Portability program, completing the regulatory framework and clearing the way for auto portability’s widespread adoption.
This new development represents an important milestone on the path to auto portability, a private-sector innovation that will help prevent 401(k) cashout leakage, increase plan efficiencies and improve the prospects of a timely, comfortable and secure retirement for millions of Americans.
The Demographics of 401(k) Cashout Leakage
Cashout leakage, a long-standing problem in America’s defined contribution system, is a silent crisis that unnecessarily robs millions of Americans of a comfortable, timely or secure retirement. Plagued by misunderstanding and neglect, it’s vitally important to understand the problem and to take decisive action to curb it.
What’s Missing from the SECURE Act? A Provision to Plug Cash-Out Leakage
The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, passed by the House of Representatives on May 23, has the potential to make a positive impact on Americans’ retirement readiness. One of the bill’s key provisions involves removing restrictions on open multiple employer plans (MEPs), which would make it less costly for small businesses to offer retirement savings plans to employees.
Spotlight on Cashout Leakage: The Fundamentals
Cashout leakage, a long-standing problem in America’s defined contribution system, is a silent crisis that unnecessarily robs millions of Americans of a comfortable, timely or secure retirement. Plagued by misunderstanding and neglect, it’s vitally important to understand the problem and to take decisive action to curb it.
The first of a five-part series, this article addresses the fundamentals of cashout leakage.
How Auto Portability Serves Participants’ Best Interests: Part 5
In this series, I identify five key reasons why an auto portability program serves the best interests of plan participants.
Previously: In Part 1, I examined the dramatically improved participant outcomes that will result from a program of auto portability. In Part 2, I described how auto portability, by enhancing and extending automatic rollover programs, represents an enhanced standard of participant care. In Part 3, I presented evidence that the adoption of auto portability could lead to a reduction in plan expenses. In Part 4, I addressed how auto portability could enhance 401(k) participants’ financial wellness.
In part 5, my final installment of the series, I explain how auto portability can mitigate retirement-related cybersecurity risks.