Foundational Research

Key Portability Finding Located in EBRI’s Retirement Confidence Survey

RCH's Tom Hawkins digs into EBRI's 2022 Retirement Confidence Survey (RCS) and finds an interesting and valuable finding not referenced in the organization’s initial report, officially released to the public on Thursday, April 28th. In an excerpt of a report available to survey partners, the RCS has found that a plurality of job-changing 401(k) plan participants favor automatic plan-to-plan portability over consolidating their savings to an IRA, or to leaving their savings behind in their former employer’s plan. This result comes on the heels of EBRI’s 2021 survey, which found that nearly 9 in 10 participants believed that auto portability would be valuable to them, and Hawkins believes "others -- including the Department of Labor – will find 401(k) participants’ strong preference for plan-to-plan portability compelling."

How to Improve Retirement Readiness in Under-represented Groups

ASPPA Net's Ted Godbout reviews the latest research report from Alight Solutions, entitled "Improving Retirement Readiness for Underrepresented Groups." Reporting on Alight's findings, Godbout highlights the six steps that Alight offers plan sponsors to increase retirement savings for historically under-represented groups. As one of those steps, Alight advises sponsors that "implementing auto-portability can help reduce the number of automatic cash-outs that occur when people change employers" and that auto portability's impact is "most profound for marginalized groups."

Also featured in NAPA Net

Improving retirement readiness for underrepresented groups

Alight Solutions has released a new research report, entitled "Improving Retirement Readiness for Underrepresented Groups." The new paper identifies six key actions that plan sponsors can undertake to boost retirement savings for historically under-represented groups. In one of those actions, Alight advises employers that "implementing auto-portability can help reduce the number of automatic cash-outs that occur when people change employers" and that auto portability's impact is "most profound for marginalized groups."

Direct link to report (PDF format)

EBRI Issue Brief #550: Auto Portability’s Massive Incremental Benefits to Pending Legislation

EBRI Issue Brief #550, released 1/20/22, examines the effects of various public policy initiatives, including an Automatic Contribution/Plan Arrangement (ACPA), an enhanced saver's credit, a "skinny" 401(k), and a student loan debt employer match. Importantly, the EBRI study noted the massive, incremental effects of auto portability, when added to the ACPA and Saver's Credit, where it reduced overall retirement deficits by 11% to 14%, depending on race.

The Aspen Leadership Forum on Retirement Savings

In a publication released 1/6/2022 as part of the Aspen Institute's Financial Security Program, the 2021 Aspen Leadership Forum on Retirement Savings Report is a summary of the April 2021 Aspen Leadership Forum on Retirement Savings. The Forum's report devotes a page to "Six Stats That Tell the Portability Story" which notes the propensity of American workers to change jobs and to cash out. It also mentions two compelling statistics: 1) that 85% of participants like the idea of automatic portability and 2) that 57% of retirement experts supported a government mandate for auto portability, while almost half (48%) believed that automatic portability was feasible without such a mandate.

EBRI's Lori Lucas Featured in Retirement Management Journal

EBRI's CEO Lori Lucas is featured in the current issue of Retirement Management Journal in an article entitled: “The Visionaries Series – Lori Lucas, CFA – The Economic Importance of Employee Benefits for Americans Financial Security.” In the wide-ranging piece, Lucas is interviewed by RMJ editor-in-chief Robert Powell, along with Stacy Schaus, founder & CEO of Schaus Group LLC. Lucas explains EBRI's efforts to bring clarity to the problem of cashout leakage, as well as their ongoing efforts to analyze the impact of auto portability on preserving Americans' retirement savings.

How Small Cashouts Can Affect Future Retirement Income

NAPA Net's Ted Godbout reports on new research from Alight Solutions that examines the problem of small account cash outs, and its highly-detrimental effect on retirement income. Whereas 4 in 10 job-changers of all balances cash out, the numbers skyrocket for balances less than $5,000, and when compound interest is considered, the lost retirement income is surprising. Godbout notes that the study highlights new technology, referencing "the emergence of auto-portability programs, such as one offered by the Retirement Clearinghouse."

The impact of 401(k) cash-outs on retirement income

Alight Solutions has released updated research (The impact of small amount cash-outs on retirement income) that addresses the impact of small-balance 401(k) cashout leakage. For those with balances less than $1,000, the study finds that 80% cash out, and with balances between $1,000 and $5,000, nearly two-thirds cash out. The study also observes that "new and innovative ideas, such as auto portability, can help curb this leakage and preserve retirement assets."