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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.


Mar
30
2020

Think Twice Before Tapping Your 401(k) for Short-Term Needs

Wall Street JournalIn extraordinary times like these, it is understandable that Americans need emergency cash injections to pay expenses. But before tapping their 401(k)s, workers should at least follow the advice offered by the old saying “think twice,” and consider all sources of short-term cash, before prematurely cashing out their 401(k) savings (WSJ: “The Emergency 401(k) Button,” March 20). Even if tax and other penalties on 401(k) cash-outs during this period are waived, Americans who cash out forfeit the additional savings which the sums they receive would have accrued by retirement, had they remained incubated in the U.S. retirement system.

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Mar
16
2020

The Institutionalization of Portability is Key to Reducing Cash-Out Leakage

Employee Benefit News LogoAlthough defined contribution plan recordkeepers and sponsors have made considerable progress helping participants retain savings through reduced fees over the past decade, job-changing participants’ 401(k) savings account balances remain in a state of dangerous limbo, as participants often succumb to the temptation of cashing out. EBRI reports that at least 4.5 million—or 40%—of job-changing participants cash out $92.4 billion in 401(k) savings from the U.S. retirement system every year.

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Feb
05
2020

How Sponsors can Help Minorities Save More for Retirement

Employee Benefit News LogoEvery year, our nation’s retirement system loses $92 billion in savings because 401(k) plan participants prematurely cash out their accounts when they change jobs. This is the most recent estimate from the Employee Benefit Research Institute (EBRI), and while this finding affects all American workers, minorities are hit hardest.
 

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May
23
2018

Understanding and Solving the Problem of Women’s 401(k) Cashout Leakage

Solving the problem of women's cashout leakageOn May 22ndat a Women’s Institute for a Secure Retirement (WISER) roundtable addressing strategies, choices and decisions for women’s retirement income, important new data was presented that highlights the challenges faced by women in preserving their 401(k) savings when changing jobs – particularly for women with balances less than $5,000.

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Mar
26
2018

No Plan is an Island

Employee Benefit NewsNo man is an island entire of itself; every man

is a piece of the continent, a part of the main;

if a clod be washed away by the sea, Europe

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Feb
23
2018

A New Solution to Tackle the Old Problem of Missing Participants

Employee Benefit NewsDespite differences big and small, all retirement plan sponsors and record-keepers experience at least one common problem—the seemingly intractable incidence of participants who have left behind small accounts in the plans sponsored by their former employers and failed to update their address when they subsequently change residence, a.k.a. missing participants.

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Nov
15
2017

The Results Are In: Auto Portability is a Winner!

And the winner is Auto PortabilityOn 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.”

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Feb
27
2017

Big Changes Coming for Small 401(k) Accounts

Speed of Retirement GlacierThe pace of change in today’s world is faster than ever -- and accelerating.  Consider the vast change witnessed by today’s centenarians over the course of their lives – moving from the horse-and-buggy to aviation, moon landings, the Internet and smartphones.

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May
09
2016

What you won’t hear in commencement addresses

MarketWatchIn his May 9th article in MarketWatch’s Retirement Mentors blog, RCH President & CEO Spencer Williams offers sage advice to college graduates as they enter the workforce:  consolidate your retirement savings!

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Dec
15
2015

As 401(k) Cash Out Leakage Grows, So Does Need for Auto Portability

Leaky FaucetIn his December 11th article in BenefitsPro (Addressing the Critical Problem of 401(k) Cash Outs), Nick Thornton draws much-needed attention to the magnitude of the 401(k) cash out leakage issue, due to the frictions associated with account portability when plan participants switch jobs. Thornton’s article rightly emphasizes the need for automated portability – similar to automatic enrollment and deferral increases - to effectively address the cash out problem. 

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