In the retirement community, momentum is growing to make our 401(k) system more inclusive and to ensure that retirement savings are more equitable.

I'm a big fan of 401(k) plan consultants, who’ve been forceful advocates for the adoption of best practices at leading retirement plan sponsors. So, it’s surprising to me that, when it comes to automatic rollover programs, consultants sometimes miss the mark, at least in terms of participant outcomes.

August 14^th is National Financial Awareness Day, and 401(k) plan sponsors have been instrumental in increasing the financial awareness of millions of Americans by providing them with access to workplace retirement savings plans that materially enhance their prospects for a timely and comfortable retirement.

With $10 trillion in 401(k) and other defined contribution retirement assets to safeguard, retirement industry regulators are intensely focused on the issue of cybersecurity.

The latest developments signifying regulatory resolve include enforcement actions by the Securities and Exchange Commission (SEC), who in August 2021 sanctioned 8 firms in three separate actions (links here, here and here), for failing to have cybersecurity policies and procedures in place, potentially leading to compromised private client data. 

“America’s retirement system is sustainable” said no one, ever.

That’s the basis for my somewhat cynical reaction to a February 14^th, 2022, Request for Information (RFI) issued by the DOL’s Employee Benefits Security Administration (EBSA). The RFI (Request for Information on Possible Agency Actions to Protect Life Savings and Pensions from Threats of Climate-Related Financial Risk) was issued pursuant to a May 20^th, 2021 Executive Order, and asks respondents to identify climate change related threats to “the life savings and pensions of U.S. workers and families.”

I’m old enough to remember a time when auto portability was a concept, scarcely worthy of serious attention by practically anyone except a few zealots with an idea.

Most agree – automatic rollover programs can help plan sponsors deal with problems associated with small-balance accounts, including:

• ​High levels of missing participants
• Increased administrative costs and workload
• Increased recordkeeping fees
• Lower average account balances

When auto portability becomes ubiquitous in America’s 401(k) system, it will herald 100% fully automated, end-to-end portability for all small-balance job-changers.
 

For consenting 401(k) participants, it seems that “happy endings” are possible.

New, compelling data from an ongoing program of portability for small-balance 401(k) job-changers illustrates the effectiveness and appeal of seamless portability, revealing broader implications for auto portability and for all job-changing 401(k) participants, regardless of balance.

Draft SECURE 2.0 legislation that provides for a PBGC-based Retirement Savings Office of the Lost and Found, along with the May release of a drama-laden white paper, could leave casual observers with the mistaken impression there is a massive problem with “forgotten” 401(k) accounts.