The Plan Sponsor Case for Auto Portability

Are you a plan sponsor and want some good reasons why you should adopt auto portability?

Here are seven:

1. Reduce Plan Leakage and Strengthen Outcomes
When employees change jobs, small balances are often cashed out – driving significant “leakage” from the retirement system.

• Up to 41% of job changers cash out their accounts without an automated solution
• Billions are lost annually to taxes, penalties, and missed compounding
  
  

Auto portability keeps assets invested and connected to participants—improving long-term retirement outcomes and reinforcing the purpose of your plan.

2. Lower Administrative Burden and Costs
Managing terminated participants and small accounts can be costly and inefficient. Auto portability helps streamline these burdens by:

• Reducing the number of small-balance accounts remaining in the plan
• Minimizing uncashed checks and missing participant issues
• Automating rollover processes and eliminating manual paperwork

Sponsors benefit from lower administrative complexity and reduced plan expenses over time.

3. A Fiduciary-Aligned, Future-Ready Decision
For plan sponsors, auto portability aligns with core fiduciary priorities:

• Improving participant outcomes
• Enhancing plan efficiency
• Reducing friction and risk
• Supporting financial wellness

It also reflects a broader commitment to retirement equity, helping underserved populations – who are disproportionately likely to cash out – stay invested for the future.

4. Improve Key Plan Metrics
Auto portability doesn’t just simplify operations – it improves the overall health of your plan.

• Consolidates accounts, increasing average account balances
• Supports more favorable fee negotiations
• Enhances plan efficiency and scalability

Higher average balances are a key benchmark of plan success and can positively influence investment and pricing outcomes.

5. Deliver a Better Participant Experience
Without automation, rollovers are complex, time-consuming, and often abandoned by participants.

Auto portability changes the experience by:

• Automatically moving savings forward as employees change jobs
• Eliminating confusion, paperwork, and friction
• Preserving tax-advantaged status without participant action

The result: a seamless, modern retirement experience aligned with today’s digital expectations. New hires with small balances in prior employer plans can now have those balances moved seamlessly to their active plan account.

6. Adopt at No Cost to the Plan
Auto portability is designed to be easy to implement—and cost-effective.

• No direct cost to plan sponsors to adopt the feature
• Minimal implementation effort through your recordkeeper
• Participant-paid, transaction-based fee structure

This makes adoption a high-impact, low-friction decision.

7. Join a Growing Industry Standard
Auto portability is rapidly becoming a core feature of modern defined contribution plans.

• As of this writing, over 22,000 plans have already adopted the solution, representing over 6.8 million participants
• Supported by leading recordkeepers representing 63% of the market, by participants
• Delivered through the Portability Services Network (PSN)– a secure, nationwide digital utility connecting plans and recordkeepers

As adoption accelerates, auto portability is positioning itself as a baseline expectation for plan governance and innovation.

Summing it Up
Auto portability was designed to work within the existing retirement system – leveraging current plan infrastructure and data flows to create a simple, scalable solution to a longstanding problem.

It directly addresses:

• High workforce mobility
• Growth in small, inactive accounts
• Persistent leakage and lost savings
• Administrative inefficiencies

By solving these issues simultaneously, auto portability delivers measurable benefits for both plan sponsors and for their participants.