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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.


Jun
21
2016

Calls for Portability Solutions to Curb Cash Out Leakage Growing Louder

Washington DC USACash out leakage – the premature withdrawal of retirement savings for non-retirement expenses – is a persistent problem in the retirement industry, and growing more pervasive as employee mobility increases.

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Jun
16
2016

Interesting Finding Emerges from the Auto Portability Simulation

EBRIWhen the Auto Portability Simulation (APS) model was recently unveiled at EBRI’s 78th Policy Forum, a lot of attention was paid to the “marquee” numbers, and rightly so.  I’m referring here to the $154 billion reduction in cashout leakage, as well as the $115 billion increase in plan-to-plan roll-ins that occur under the adoption of Auto Portability. 

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Jun
09
2016

Fast & Slow Leakage Produce a Flood of Outflows

Employee Benefit NewsFirst, let’s review the definition of “leakage.” If we think of total 401(k) savings as a bucket of water, “leakage” refers to those retirement savings that, like water in a leaky bucket, are withdrawn from the U.S. retirement system every year. There are three holes in the bucket: cash-outs at the point of job change, hardship withdrawals, and loan defaults. According to the U.S. Government Accountability Office, one of these holes is much bigger than the other two combined—nearly 89% of all leakage is attributed to cash-outs that occur when a participant changes jobs. Hardship withdrawals and loan defaults together account for the remaining 11%.

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Jun
06
2016

Advice college graduates won't hear at commencement: ‘Strive for 25’

MarketWatchAs they set out into the working world, RCH President & CEO Spencer Williams counsels the Class of 2016 on the importance of developing good saving habits from the very beginning.

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May
20
2016

Auto Portability Simulation Model Unveiled at 78th EBRI Policy Forum

 EBRIOn May 12th, Retirement Clearinghouse President & CEOJ. Spencer Williams unveiled theAuto Portability Simulation(APS) at theEmployee Benefit Research Institute's 78th Policy Forum. The APS was developed by Retirement Clearinghouse in conjunction with Dr. Ricki Ingalls, Chair of Computer Information Systems at Texas State University, and Principal at Diamond Head Associates, Inc.

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May
02
2016

What the DoL's Fiduciary Rule doesn’t say

Employee Benefit NewsThe Department of Labor’s much-anticipated Fiduciary Rule is ushering in many changes across the retirement services landscape, and the new rules governing the “what, how and why” for advice at the time of a participant’s job change will undoubtedly transform the rollover-to-IRA market. However, a closer reading of the Fiduciary Rule sends a clear, if unstated, signal to plan sponsors, financial advisors and record-keepers—absent a compelling reason to roll over to an IRA, keep participants invested in a qualified defined contribution plan throughout their working lives.

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Apr
28
2016

Say What? The Arcane Lingo of Retirement Savings Portability

Scrabble Letters Portability Savings Retirement

In virtually any area of specialty, a unique jargon evolves that’s highly-specific to that field.  To insiders using the lingo every day, it seems familiar and perfectly normal.  To outside observers, it can feel like a foreign language -- with words, terms and acronyms that make no sense.  

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Apr
22
2016

For Earth Day: Consider How "Recycling" Could Apply to Our Retirement System

Safe Harbor IRA Landfill vs. RCH Recycle Auto Portability

As we observe the 46th annual Earth Day this April 22nd, we appreciate the awareness that this event has brought to the need to protect our environment, the urgency that it’s instilled in all of us, and the tangible results that have been achieved in so many important areas. Although we have much work to do, we’ve clearly come a long way since the “throwaway” culture that emerged following World War II.

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Apr
21
2016

Five Common Misconceptions About Automatic Rollovers

False Automatic Rollovers

Automatic rollover programs allow plan sponsors to force out of their plan separated participants with balances less than $5,000 into a Safe Harbor IRA.  These programs can be quite effective at helping sponsors resolve many of the problems associated with housing small-balance accounts in-plan, such as: 

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Mar
31
2016

Account consolidation time-consuming, expensive for employees

Employee Benefit NewsAs has happened so many times before, the Baby Boomer generation is once again drawing attention to an unmet need: a seamless way to consolidate their collection of retirement accounts into a single account, which is a necessary step to creating a sturdy retirement plan. Much has been written about how sponsors can improve both their plans’ overall health and their participants’ retirement outcomes by embracing roll-ins; nonetheless, the account-consolidation process remains time-consuming and expensive for most participants.

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