Consolidation Corner
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Blog
- 401k Cash Outs
- 401k Consolidation
- 401k Plan Termination
- America's Mobile Workforce
- Assisted Roll-in
- Auto Enrollment
- Auto Portability
- Auto Portability Simulation
- Automatic Roll-In
- Automatic Rollover
- Automatic Rollovers
- Boston Research Technologies
- CARES act
- Common Mistakes
- DIY Roll-In
- DOL Advisory Opinion
- EBRI
- Employee Benefit News
- ERISA Advisory Council
- Financial Services Roundtable
- Financial Wellness
- How-To
- In-Plan Consolidation
- Leakage
- Lifetime Plan Participation
- Lost Participants
- Managed Portability
- Mandatory Distributions
- MarketWatch
- Missing Participant IRA
- Missing Participants
- National Retirement Savings Cash Out Clock
- Participant Transition Management
- PLANSPONSOR
- Portability Services Network
- PSCA
- Public Policy
- RCH Services
- Retirement Income
- Retirement Plan Portability
- retirement research
- Retirement Savings Consolidation
- Retirement Savings Portability
- Roll-In
- Safe Harbor IRA
- Saver's Match
- Security
- Small Accounts
- Stale Dated Checks
- Synthetic Tenure
- Uncashed Check Services
- Uncashed Distribution Checks
- Video
- Webcast
- What is a Missing Participant?
401k Consolidation
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.
Measuring the Value of Intensive Missing Participant Searches
When it comes to locating missing plan participants, electronic searches or “e-searches” are an indispensable tool. While it’s been proven that e-searches can be highly effective, inevitably situations will arise where plan sponsors must do something more, and that typically involves performing a more intensive search, where additional search resources are applied to improve the quality of the search, over and above what an e-Search can deliver.
Four Compelling Reasons for Plan Sponsors to Adopt Auto Portability
In July, an article noted that the adoption of auto portability was picking up steam with thousands of plan sponsors already signing up for the service, delivered by the Portability Service Network (PSN). As I write this around six weeks later, that figure continues to rise at a brisk pace.
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.
Auto Portability Adoption Picks Up Steam
New retirement innovations, however compelling they may be, face their biggest challenge in surmounting the glacial pace of change that prevails in the retirement industry, where nothing comes easy.
Safe-Harbor IRAs Don’t Offer a Long-Term Saving Solution for Plan Participants
During the past several years, much progress has been made to simplify the process of enabling defined contribution plan participants to transfer their savings from one plan to another when they change jobs. These strides have been made thanks to an ongoing partnership between the private and public sectors, and between Democrats and Republicans in Congress.
In November 2023, we saw the launch of the Portability Services Network, with our nation’s leading retirement plan record-keepers—Alight Solutions, Empower, Fidelity Investments, Principal, TIAA, and Vanguard—on board as founding members. The Portability Services Network makes the digital auto portability solution a reality for helping Americans keep their retirement savings invested in the system and working for them.
A More-Enlightened Approach to Uncashed Distribution Checks
No retirement plan sponsor likes the idea of dealing with uncashed distribution checks, nor do they wish to draw unwanted regulatory attention or to become embroiled in costly litigation because of their uncashed check policies.
Unfortunately, many plan sponsors place themselves in precisely that spot, becoming unnecessarily over-burdened with unresolved uncashed checks, while inviting unwanted regulatory scrutiny and/or legal challenges by embracing flawed uncashed check policies.
A more-enlightened approach to managing the problem of uncashed checks seeks to minimize their numbers, while simultaneously steering clear of the “red flags” that could land them in hot water.
Four Key Findings from the New Auto Portability Simulation
On the heels of the 11/7/23 announcement by the Portability Services Network that the industry-led consortium has launched its digital auto portability solution powered by Retirement Clearinghouse (RCH), RCH has made available the results from a new version of their Auto Portability Simulation (APS), a discrete event simulation that models the adoption of auto portability within America’s defined contribution system, over a 40-year period.
Auto Portability: It’s About the Participants
It’s sometimes easy to forget a basic tenet about auto portability.
Auto portability is about the participants.
And not just any participants. Auto portability is about the participants who truly need it, and – according to multiple surveys – have expressed a strong preference for it.
Focus Shifts to Plan Sponsors as Portability Network Set to Go Live
When the Portability Services Network (PSN) goes live at the beginning of the fourth quarter of 2023, the focus of attention for auto portability will shift from the industry-led network of service providers to the leading plan sponsors who will begin adopting the new plan feature.
As PSN operations commence, and the automated plan-to-plan consolidation of small balances begins, a familiar industry adoption pattern will emerge – where innovators within the plan sponsor community lead the charge and are quickly followed by others.
The Future is Brighter for Small-Balance Retirement Accounts
While small-balance retirement savings accounts have fared poorly in the past, their future has never looked brighter. Real progress is being made in reducing their numbers while simultaneously preserving and consolidating their savings, vs. previous “solutions” that encouraged them to cash out or exiled them to dead-end safe harbor IRAs.
The 401(k) “House-Cleaning” to Come
The increase in the automatic rollover threshold from $5,000 to $7,000, as provided for in section 304 of the SECURE 2.0 legislation, will become effective for mandatory distributions made after December 31, 2023.
What will be the impact of these provisions, if fully embraced by plan sponsors? One thing is certain – on both a one-time and ongoing basis, far more terminated participants will be subject to the automatic rollover provisions of their former-employers’ plans.
-
Blog
- 401k Cash Outs
- 401k Consolidation
- 401k Plan Termination
- America's Mobile Workforce
- Assisted Roll-in
- Auto Enrollment
- Auto Portability
- Auto Portability Simulation
- Automatic Roll-In
- Automatic Rollover
- Automatic Rollovers
- Boston Research Technologies
- CARES act
- Common Mistakes
- DIY Roll-In
- DOL Advisory Opinion
- EBRI
- Employee Benefit News
- ERISA Advisory Council
- Financial Services Roundtable
- Financial Wellness
- How-To
- In-Plan Consolidation
- Leakage
- Lifetime Plan Participation
- Lost Participants
- Managed Portability
- Mandatory Distributions
- MarketWatch
- Missing Participant IRA
- Missing Participants
- National Retirement Savings Cash Out Clock
- Participant Transition Management
- PLANSPONSOR
- Portability Services Network
- PSCA
- Public Policy
- RCH Services
- Retirement Income
- Retirement Plan Portability
- retirement research
- Retirement Savings Consolidation
- Retirement Savings Portability
- Roll-In
- Safe Harbor IRA
- Saver's Match
- Security
- Small Accounts
- Stale Dated Checks
- Synthetic Tenure
- Uncashed Check Services
- Uncashed Distribution Checks
- Video
- Webcast
- What is a Missing Participant?