CHARLOTTE, NC—December 3, 2024—Portability Services Network (PSN) announces that, in its first year of operation, more than 15,000 plans representing approximately 5 million participants have signed up for auto portability. Robert L. Johnson, Chairman of the Portability Services Network and Retirement Clearinghouse, said, “I heartily applaud the six recordkeepers that launched Portability Services Network for their unwavering commitment to improving the retirement welfare of America’s under-saved and under-served workers. Auto portability was conceived as an innovation to benefit minority and women savers, and it is immensely gratifying to witness its coming to fruition through the hard work of Alight, Vanguard, Fidelity Investments, Empower, TIAA, and Principal® to make auto portability a reality. We encourage more plan sponsors and recordkeepers to join and do their part to assist low-income workers in achieving a financially secure retirement."

Recently, we’ve read – mainly via paid promotions – about the existence of so-called “world-class” automatic rollover IRA services, which seem to be little more than old-school, traditional automatic rollover IRAs laying claim to unspecified, premium features.

On September 2, 1974, President Gerald Ford signed the Employee Retirement Income Security Act (ERISA) into law. Since that time, ERISA has become the regulatory backbone of the retirement services industry. And on September 12, members of the industry, along with legislators, government regulators, and other private and public sector representatives, came together to celebrate ERISA’s golden anniversary in Washington, D.C. My colleagues and I were honored to be among those in attendance.

With the release of Vanguard’s September 2024 study (Job transitions slow retirement savings), we can consider adding a new term – shrinkage – to the lexicon of retirement savings ills associated with America’s mobile workforce, taking its spot alongside its sibling, cashout leakage.

In July, an article noted that the adoption of auto portability was picking up steam with thousands of plan sponsors already signing up for the service, delivered by the Portability Service Network (PSN). As I write this around six weeks later, that figure continues to rise at a brisk pace.

As PSN operations have commenced, and as the automated plan-to-plan consolidation of small balances begins, a familiar industry adoption pattern is emerging – where innovators within the plan sponsor community lead the charge and are quickly followed by others.

For plan sponsors who are still considering adopting auto portability, here are four compelling reasons why you should move now to embrace the new plan feature.

New retirement innovations, however compelling they may be, face their biggest challenge in surmounting the glacial pace of change that prevails in the retirement industry, where nothing comes easy.

During the past several years, much progress has been made to simplify the process of enabling defined contribution plan participants to transfer their savings from one plan to another when they change jobs. These strides have been made thanks to an ongoing partnership between the private and public sectors, and between Democrats and Republicans in Congress.

In November 2023, we saw the launch of the Portability Services Network, with our nation’s leading retirement plan record-keepers—Alight Solutions, Empower, Fidelity Investments, Principal, TIAA, and Vanguard—on board as founding members. The Portability Services Network makes the digital auto portability solution a reality for helping Americans keep their retirement savings invested in the system and working for them.

On May 16th, Robert L. (Bob) Johnson, Chairman of The RLJ Companies, Retirement Clearinghouse (RCH) and the Portability Services Network (PSN), delivered the keynote address to the 2024 EBRI Spring Policy Forum, co-hosted by the American Benefits Council.  

In Johnson’s address, entitled “Helping to narrow the nation’s lingering racial wealth gap” – the legendary Black American entrepreneur gave Forum attendees insight into the businessman’s long, purpose-driven journey to create entrepreneurial solutions to social problems. Johnson’s achievements began taking shape in the early 1980’s with his creation of Black Entertainment Television (BET) and have culminated in his current efforts in the retirement sector, where he’s become laser-focused on leveraging public/private sector solutions that narrow the wealth gap for minorities and women.

On the heels of the 11/7/23 announcement by the Portability Services Network that the industry-led consortium has launched its digital auto portability solution powered by Retirement Clearinghouse (RCH), RCH has made available the results from a new version of their Auto Portability Simulation (APS), a discrete event simulation that models the adoption of auto portability within America’s defined contribution system, over a 40-year period.

It’s sometimes easy to forget a basic tenet about auto portability.

Auto portability is about the participants.

And not just any participants. Auto portability is about the participants who truly need it, and – according to multiple surveys – have expressed a strong preference for it.