Much has been written in this column and elsewhere about the benefits that auto portability, and seamless plan-to-plan portability in general, can provide to millions of retirement-savers across America. As any entrepreneur can testify, it is challenging to initiate a major innovation, and then persevere through all the twists and turns along the road to widespread adoption. Fortunately for everyday Americans saving for retirement, there is already an established blueprint in place for launching a nationwide, private-sector retirement clearinghouse that will enable auto portability.
The blueprint comes from the successful execution of auto enrollment during the previous decade. Prominent behavioral economist Richard Thaler, who would go on to be awarded the 2017 Nobel Prize for Economic Science, conducted the initial research which demonstrated that a default 401(k) program which required plan participants to opt out would drive better retirement-saving results than one mandating participants to opt in—for the simple reason that opt-out plans override the behavioral tendency to procrastinate.