In his December 16th, 2015 article in MarketWatch, RCH’s CEO Spencer Williams offers a year-end checklist for those retirement savers who’ve elected to leave qualified retirement savings accounts behind with their former employers.
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.
In his December 11th article in BenefitsPro (Addressing the Critical Problem of 401(k) Cash Outs), Nick Thornton draws much-needed attention to the magnitude of the 401(k) cash out leakage issue, due to the frictions associated with account portability when plan participants switch jobs. Thornton’s article rightly emphasizes the need for automated portability – similar to automatic enrollment and deferral increases - to effectively address the cash out problem.
With attention-grabbing headlines about major security breaches occurring almost daily, plan sponsors need to be assured that their service providers are on guard 24-7, protecting sensitive information and intellectual property, wherever it may reside.
Auto enrollment, codified in law by the Pension Protection Act of 2006, was drafted with the best of intentions—to increase Americans’ retirement savings—but it has had the unintended consequence of impairing plan effectiveness. By proliferating small accounts in plans, auto enrollment has caused a decrease in average account balances throughout the U.S. retirement system. Adding to the urgency of this issue is the rising rate of auto enrollment adoption across defined contribution plans of all sizes, but particularly among larger plans.
In his 11/16/15 MarketWatch article Boomers need to consolidate retirement accounts immediately RCH President & CEO J. Spencer Williams notes that the baby boomer generation, which is closest to retirement age, stands to benefit the most from consolidating their retirement savings, vs. leaving their accounts behind at former employers.
Chris Garza, RCH’s Service and Consolidation Team Manager, provides insight into the top five mistakes that participants make when changing jobs.
Every day, we’re reminded that recycling is the responsible thing to do: from the recycling bins we walk by, to the paper we use, and the cans and bottles that we drink from. All of us would agree that conservation of our precious resources is critical, so we gladly pitch in and do our part.
We humans are not islands. Everything we do affects the people, neighborhoods and ecosystems around us in some way. One act of kindness for another person can inspire the recipient to perform a good deed for someone else, and through a ripple effect, many others can benefit.
How many of us will be so fortunate as to participate in an employer-sponsored retirement plan every day of our working careers? Or, for an even more uncommon scenario, how many of us will work for the same company for 30 or 40 years? Yet, as has been amply established by the Employee Benefit Research Institute (EBRI), those who can raise their hands and respond “yes” to either of these questions routinely show up in the top decile of savers who are well-prepared for retirement—and these participants provide a clear blueprint for retirement-saving success.