Consolidation Corner

Changing Jobs in 2017? Take Your Retirement Savings With You

Posted by Neal Ringquist on Jan 3, 2017 11:41:39 AM


In his latest article in MarketWatch, posted on New Year’s Eve, RCH President, CEO and RetireMentor Spencer Williams counsels those who switched jobs in 2016 to make their New Year’s resolutions to roll-in all of their retirement savings accounts – not just the account in their most recent prior-employer plan – into their new-employer plan.


For any account that’s not yet rolled in to a current-employer plan, Williams strongly urges that savers update their current contact details.

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Topics: MarketWatch, 401(k) Consolidation, Managed Portability, Roll-In, Participant transition management, assisted roll-in

One 2017 New Year’s Resolution for Plan Sponsors: Encourage Roll-Ins

Posted by Neal Ringquist on Dec 12, 2016 8:04:12 AM

As 2016 draws to a close, most observers will reflect upon the events that have dominated retirement industry news coverage:  the Fiduciary Rule, the 10-year anniversary of the Pension Protection Act, and the Presidential election. These events will clearly shape plan sponsors’ activities and priorities for the New Year.

Less publicized, but perhaps more impactful are the recommendations provided in November, 2016 by the ERISA Advisory Council (EAC) on “Participant Plan-to-Plan Transfers and Account Consolidation for the Advancement of Lifetime Plan Participation” – released following three years of expert testimony.  

Plan sponsors would be well-served by reviewing the EAC’s Executive Summary and working the message of lifetime plan participation into their participant communications and retirement plan initiatives.


A good place to start is to encourage and facilitate plan-to-plan transfers, known as “roll-ins.” 

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Topics: 401(k) Consolidation, Roll-In, PSCA, assisted roll-in, 401k Specialist

Miracle on Retirement Street

Posted by Neal Ringquist on Dec 6, 2016 12:31:28 PM


In his latest article in MarketWatch, RetireMentor and RCH CEO Spencer Williams gets us into the festive, holiday spirit by showcasing the “miracle” of compound interest. Compound interest is particularly relevant to retirement savers, whose nest eggs will incubate over a career. 

Thus, any withdrawal of retirement savings – particularly cashouts that are made early in a career – can rob savers of thousands of dollars at retirement age. Less well-known, but still damaging, are the accounts that are left stranded and dinged every year by fees. 

Williams’ two examples tell the compound interest tale.  In his first example, Williams demonstrates that a 30-year old saver cashing out a $5,000 401(k) account will lose almost $52,000 in compound interest savings by age 65. In Williams’ second example, our 30-year old doesn’t cash out, but leaves his savings stranded at his previous employer, where he’ll pay an additional $2,052 in fees, which, on a compounded basis, translates to a whopping $8,488 in lost savings at age 65.

Bottom line, retirement savers should consolidate their qualified retirement savings accounts to their current employers, whenever they switch jobs. 

Consolidation allows retirement savers to enjoy the gift that keeps on giving: compound interest.

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Topics: MarketWatch, 401(k) Consolidation, Managed Portability, Roll-In, Participant transition management, assisted roll-in

A Roll-In in Time Saves Far More Than Nine

Posted by Neal Ringquist on Nov 7, 2016 8:15:00 AM


In his latest MarketWatch RetireMentors column, RCH CEO Spencer Williams modifies the familiar proverb “a stitch in time saves nine” for the benefit of 401(k) savers who have multiple retirement savings accounts. A roll-in becomes the equivalent of the stitch, saving participants considerable time and money as they change jobs.

As the original proverb suggests, Williams argues that savers are much better-off consolidating their balances at each job change, vs. waiting until retirement to do so.

Williams backs up his advice with plenty of facts. 

The Employee Benefit Research Institute (EBRI) estimates that the average American will change jobs over seven times in a 40-year career. Using figures obtained from a study of mobile workforce behaviors, Williams calculates that waiting to perform seven roll-ins at retirement age would take between 35 and 42 weeks of effort. 

To make matters worse, unconsolidated accounts lose a substantial amount in fees and compounded interest. For example, an account stranded at age 30 would lose an estimated $6,708.54 in fees and compounded interest by age 65.  

Finally, applying the “time is money” theory, Williams asserts that $100 to $500 of personal time spent rolling in balances now is much better than spending $700 to $3500 at age 65.

In addition to their virtues of saving time and money, roll-ins reduce the risk of losing your savings. Savers who’ve stranded accounts with less than $5,000 may be subject to being forced out of their plan and into a safe-harbor IRA, or worse – find themselves facing an involuntary cash-out if their balance is less than $1,000. 

With one in six Americans relocating in any given year, the chances of these small, stranded accounts “going missing” can skyrocket.

As Williams so aptly demonstrates, a “roll-in in time” will save you far more than nine when you’re ready to retire.

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Topics: MarketWatch, 401(k) Consolidation, Managed Portability, Roll-In, Participant transition management, assisted roll-in

How You Should Observe ‘National Save for Retirement Week’

Posted by Neal Ringquist on Oct 5, 2016 12:48:33 PM


In his most recent article in MarketWatch, RCH’s Spencer Williams notes the upcoming ‘National Save for Retirement Week’ event, and employs some clever word-association that has readers re-thinking the meaning of the word “save.”

As Williams points out, the worst decision an employee can make is not to “save” in the first place.  If they’ve made the right call to participate in their employer’s qualified plan, then the word “save” can take on a whole new meaning at the point they change jobs, when they may need to be rescued from the second-worst decision:  to cash out their retirement savings.


Citing a recent study by EBRI and ICI, Williams notes that consistent participation in a 401(k) plan is closely-linked to higher levels of job tenure.  Thus, if plan participants can avoid cashing out at job change and roll their balances forward, they create “synthetic tenure” – the unbroken, continuous participation in a qualified plan throughout their working career.

When National Save for Retirement Week begins on October 16, remember to “save” your retirement by never cashing out and by always keeping your savings invested in a defined contribution plan.



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Topics: MarketWatch, 401(k) Consolidation, Managed Portability, Roll-In, Participant transition management, assisted roll-in

The One Solution Everyone in DC Agrees Upon: We Need Consolidation

Posted by Neal Ringquist on Sep 22, 2016 8:30:00 AM


This summer, there’s one topic that everyone in Washington, D.C. seems to agree upon: the importance of consolidation in protecting Americans’ retirement security.

EBRI/ICI Research Points to Consolidation

On September 8th, EBRI and ICI jointly released the study “What Does Consistent Participation in 401(k) Plans Generate? Changes in 401(k) Account Balances, 2010–2014” -- describing the significant, positive impact that consistent plan participation has on participants’ 401(k) account balances. The study revealed that the median account balance of “consistent” participants – the 8.8 million participants who maintained participation and steady contributions from 2010-2014 – was more than three times the median balance across all participants at year-end 2014. 

Behind the study’s marquee numbers lies a hidden gem: job tenure for “consistent” participants was significantly higher than the job tenure for all participants.  Multiple studies have demonstrated that high cashout rates occur as participants change jobs.  Thus, consolidation programs (ex. – Auto Portability) could bridge this “tenure gap” – in effect, generating “synthetic tenure” by seamlessly moving balances forward when participants change plans.

The tenure gap is expected to worsen as the phenomenon of the “gig” economy accelerates, increasingly necessitating a system of portable retirement savings.

The Bipartisan Policy Center Weighs in on Consolidation

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Topics: 401(k) Consolidation, Managed Portability, Roll-In, Participant transition management, assisted roll-in

Consolidation: Make the Smart Decision the Easiest Decision

Posted by Neal Ringquist on Sep 13, 2016 8:30:00 AM

“Make the smart decision the easiest decision” seems like an obvious goal for plan sponsors when designing participant-directed retirement plans, and it’s certainly driven the rapid adoption of the autos—auto enrollment, auto deferral escalation, and auto investment options, such as target-date funds and managed accounts.

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Topics: MarketWatch, 401(k) Consolidation, Managed Portability, Roll-In, Participant transition management, assisted roll-in

Making Your Day, Re-Visited: When Retirement Savers’ Luck Runs Out

Posted by Neal Ringquist on Sep 7, 2016 2:48:25 PM


In his most recent article in MarketWatch, "Are you still feeling luck, 401(k) saver?" RCH’s Spencer Williams reprises last year’s 7/10/15 article where he channeled Clint Eastwood’s iconic movie hero “Dirty Harry” Callahan. Just like the movie villains whose luck ran out at the hands of Dirty Harry, retirement savers who strand their 401(k) accounts must run a gauntlet of decidedly unlucky outcomes – including involuntary cashouts, automatic rollovers and savings-depleting fees.

Unlike Dirty Harry’s foes, retirement savers have a shot at redemption, by rolling their hard-earned savings in to their next employer’s plan. According to the most recent PSCA annual survey of plan sponsors, almost 98% of plans allow roll-ins from other plans, almost 62% from IRAs. However, for those unfortunates who live dangerously and strand their savings, they can take cold comfort in the knowledge that their former employer could face higher fines for failing to keep their contact details up-to-date. For those savers that stranded accounts with less than a $5,000 balance, this means their former employer has even more motivation to force those accounts out of the plan and into safe harbor IRAs with the savings-depleting combination of high fees and low returns.


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Topics: MarketWatch, 401(k) Consolidation, Managed Portability, Roll-In, Participant transition management, assisted roll-in

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