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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.


Sep
29
2015

A Blueprint for Lifetime Participation in Plans

Employee Benefit NewsHow many of us will be so fortunate as to participate in an employer-sponsored retirement plan every day of our working careers? Or, for an even more uncommon scenario, how many of us will work for the same company for 30 or 40 years? Yet, as has been amply established by the Employee Benefit Research Institute (EBRI), those who can raise their hands and respond “yes” to either of these questions routinely show up in the top decile of savers who are well-prepared for retirement—and these participants provide a clear blueprint for retirement-saving success.

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Aug
19
2015

What To Look For In A Roll-In Service Provider

Employee Benefit NewsGive ‘Em What They Want—And Need!

Warren Cormier, CEO of Boston Research Technologies, recenty published a research study that revealed that a large majority of plan participants are receptive to consolidating their retirement savings accounts in their current plans.

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Jul
17
2015

Safe Harbor IRAs Aren’t Always Safe

Employee Benefit NewsPlan sponsors can help themselves and their participants over the long term by rolling balances of $5,000 or less from inactive participants into safe harbor IRAs. However, for various reasons discussed below, many safe harbor IRAs don’t live up to their name and could leave sponsors with unexpected fiduciary liability.

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Jun
16
2015

How to Make Mandatory Distributions More Fiduciary Friendly

Employee Benefit NewsMandatory distributions from employer-sponsored plans are a creation of regulation—specifically, a section of ERISA that allows plan sponsors to distribute accounts with less than $5,000 out of a qualified plan and into a safe harbor IRA. If plan sponsors follow the rules, they are protected from legal recourse, and the rules are simple: act in a fiduciary manner when choosing a provider for their program. However, that word—“fiduciary”—is often hard to define and can be interpreted in many ways, so it begs the question: “How does a sponsor best fulfill that responsibility in the context of a mandatory distribution program?”

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May
15
2015

Enhance Auto Enrollment with Auto Portability

Employee Benefit NewsThe Pension Protection Act of 2006 created a safe harbor for retirement plan sponsors to automatically enroll employees in their plans. This provision was designed to help plan sponsors and participants over the long term, and it has—but it also unintentionally fueled a surge in small accounts, hurting both constituencies.

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Apr
11
2015

Reduce Plan Fees by Increasing Account Balances

Employee Benefit NewsRetirement plan sponsors can reap significant rewards from the automated, two-way flow of retirement savings accounts into and out of plans. This “automated portability” spawns important downstream benefits for sponsors—but sponsors can only capture them by choosing to recycle mandatory distributions rather than continuing to dump them into an already sizable landfill of micro-balance safe harbor IRAs (see Employee Benefit News previous blog post titled Why Dump Mandatory Distributions In A Landfill When You Can Recycle?). This article focuses on one of those benefits—the decrease in plan costs obtained through the increase in a plan’s average account balance.

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Mar
16
2015

Why Dump Mandatory Distributions in a Landfill When You Can Recycle?

Employee Benefit NewsMandatory distributions of small 401(k) accounts when participants separate from service provide many benefits for plan sponsors, including lower administrative costs and higher average account balances. However, these “automatic rollovers” also indirectly cause billions of dollars to leak out of the U.S. retirement system every year through cash-outs.

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Feb
17
2015

DIY Plan-To-Plan Portability Is Harder Than You Think

Employee Benefit NewsHave you ever tried to fix a leaky kitchen faucet yourself? If so, the task probably seemed simple at the outset. However, if you’re not an experienced plumber, you may have inadvertently compounded the small problem of a leak — perhaps by over-tightening a nut, pinching the washer, stripping the threads, or worst of all, splitting the pipe — and unintentionally made the situation worse, as well as expensive to fix.

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Jan
11
2015

Add ‘Consolidation’ To The Script For Improving Plan Metrics

Employee Benefit NewsInitiatives by employers to drive up savings and enrollment in their retirement plans over the past decade have generally followed the same three-pronged approach — participate, save, diversify.

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Dec
16
2014

5 Retirement Plan Resolutions For 2015

Employee Benefit NewsNew Year’s resolutions aren’t just for dieters and exercisers. The start of a new year is an ideal time for retirement plan sponsor to assess the effectiveness of their plan. Virtually all plan sponsors have areas that are ripe for improvement. Here are five resolutions to make and keep in 2015 to ensure you have a smoothly-running, cost-effective plan than succeeds at preparing employees for retirement.

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