Based on solid research, we’ve long known that typical automatic rollover IRAs result in high levels of cashout leakage. We’ve also suspected that they’ve contributed to an explosion of small-balance IRAs.
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.
As I wrote in a previous article, 401(k) automated portability is an idea whose time has come. To achieve that vision, how will we get from the present state to full automation of the plan-to-plan roll-in process?
This article, as well as the video below, offers readers a roadmap for the progression from ‘tired’ to ‘wired’ and finally, to the ‘inspired’ state that will eventually characterize 401(k) roll-ins.
Researchers realize that long-term retirement planning is not a natural act for most 401(k) plan participants. Consequently, important 401(k) plan features have evolved (ex. – auto enrollment, auto escalation, QDIA funds, etc.) to overcome the mis-match and to promote saving for retirement. Many of these features work spectacularly well – but only for as long as participants are actively participating in that plan.
In this series, I identify five key reasons why an auto portability program serves the best interests of plan participants.
Previously, in Part 1, I examined the dramatically improved participant outcomes that will result from a program of auto portability.
In Part 2, I describe how auto portability, by enhancing and extending automatic rollover programs, represents an enhanced standard of care for participants.
Plan sponsors considering the adoption of auto portability must determine that, by participating in the auto portability program, they are acting prudently and solely in the interests of their plan’s participants and beneficiaries.
How are you hoping to improve yourself in 2018?
The most common New Year’s resolutions usually have to do with personal appearance, health, or behavior—losing weight, exercising more, dieting, quitting smoking, etc. Popular polls indicate that many of us are after a slimmer, fitter body for ourselves after each New Year’s Day.
Similarly, defined contribution plan sponsors are likely thinking about how they can make their plans more attractive and streamlined in 2018.
On November 7th, Retirement Clearinghouse (RCH) issued a press release announcing the results of the first-ever implementation of auto portability, as evaluated by Boston Research Technologies (BRT)’s Warren Cormier in his just-published white paper “Making the Right Choice the Easiest Choice: Eliminating Friction and Leaks in America’s Defined Contribution System.”
On July 11th, 2017, a small group of retirement services professionals at Retirement Clearinghouse (RCH) successfully conducted the first-use of a new and important financial technology. Known as “locate & match” -- the technology represents a breakthrough in the ability to automatically move small balances forward in America’s defined contribution system, and forms the backbone of RCH Auto Portability.