Foundational Research

Auto portability would reduce plan leakage – EBRI study

P&I's Brian Croce reports on the new EBRI study examining the impacts of auto portability, finding that the plan feature "would significantly reduce plan leakage" -- estimated by EBRI at $92.4 billion per year. Croce recaps the impressive benefits projected for auto portability under EBRI's RSPM model, and notes the recent actions by the U.S. Department of Labor, who "gave Retirement Clearinghouse the green light to expand its auto-portability program, which is expected to reduce plan leakage and missing participants."

401(k) Auto-Portability Could Boost Retirement Savings by Billions

NAPA Net's Ted Godbout reports on a new EBRI study, released 8/15/19, that assesses the impact of auto portability on the nation's 401(k) system. Godbout highlights the benefits of auto portability to the entire system and to specific demographic groups, as well as the benefits of the feature when considered in tandem with other policy initiatives. Godbout concludes by noting that "these latest findings come on the heels of Retirement Clearinghouse receiving final approval from the Department of Labor granting relief from ERISA’s prohibited transaction restrictions to receive fees in relation to its auto-portability program, allowing the firm to move forward."

New EBRI Issue Brief Analyzes Auto Portability's Impact on Preserving Retirement Savings

On 8/15/19, the Employee Benefit Research Institute (EBRI) published a comprehensive Issue Brief addressing the impact of auto portability on preserving retirement savings lost to 401(k) cashout leakage. Authored by Jack VanDerhei, EBRI's Director of Research and announced in an EBRI press release, the analysis utilizes EBRI's Retirement Savings Projection Model (RSPM) to quantify auto portability's impressive benefits 1) as a standalone policy initiative, 2) for specific demographic segments and 3) in tandem with other policy initiatives that expand access to workplace retirement savings plans. Critically, the Issue Brief also highlights the ongoing severity of the 401(k) cashout leakage problem, which their model estimates at $92.4 billion per year as of 2015, and "representing a serious problem that affects the potential of 401(k) plans to produce adequate income replacement in retirement."

Defined Contribution Auto-Portability Program Is First To Gain DOL Approval

Mercer's Law and Policy Group reports on the finalized prohibited transaction exemption (PTE) obtained by Retirement Clearinghouse from the U.S. Department of Labor (DOL) for the RCH Auto Portability program. The article also addresses the broader regulatory framework, including Advisory Opinion 2018-01A, which identified certain fiduciary responsibilities of plan sponsors and of RCH.

EBRI's VanDerhei Addresses PSCA Conference, Including Auto Portability Update

ASPPA Net's John Iekel covers EBRI Research Director Jack VanDerhei's 5/1/19 presentation before the PSCA National Conference, where VanDerhei provided an update on auto portability's benefits, as calculated in EBRI's Retirement Security Projection Model (RSPM). According to Iekel, VanDerhei asserted that "introducing auto-portability for participants who are Gen Xers reduced retirement savings shortfalls for couples regardless of which dies first, and for single people regardless of gender."

Also Featured in NAPA Net (link)

EBRI webinar examines impact of tenure on retirement savings

RCH's Tom Hawkins summarizes the April 10th EBRI webinar Trends in Employee Tenure, which offered EBRI’s latest research examining broad employee tenure trends, and the impact that shorter tenure has on retirement savings. The webinar’s presenters included Craig Copeland, EBRI and Spencer Williams, Retirement Clearinghouse (RCH), and was moderated by Stacy Schaus, Schaus Group LLC. In his portion of the presentation, Williams introduced the concept of “synthetic tenure” – whereby enhancing system-wide portability -- particularly for small accounts -- enables participants to preserve their savings through job changes, mirroring the success of EBRI’s longer-tenured, “consistent participation” population.

Shorter Employee Tenure Demands Progressive Plan Design

PLANSPONSOR's Amanda Umpierrez examines the latest research from EBRI revealing decreasing employee tenure, concluding that shorter tenure could adversely impact retirement plan success. Umperriez quotes RCH EVP Neal Ringquist, who ties decreasing tenure to destructive outcomes, such as cashing out, and RCH CEO Spencer Williams, who advocates for immediate plan eligibility and adoption of automatic enrollment provisions. Finally, EBRI's Craig Copeland, author of the research, addresses the beneficial impact of auto portability, stating that “[a]uto-portability will play an increasingly important role because it helps a lot with balance preservation.”

EBRI Webinar Extends Auto Portability’s Benefits to Young Millennials

In their March 20th webinar "Achieving Retirement Income Equivalency Between Final-Average-Pay Defined Benefit Plans and Automatic Enrollment 401(k) Plans in the Private Sector", the Employee Benefits Research Institute (EBRI) revealed more research supporting the case for auto portability, with their finding that auto portability could dramatically improve defined contribution plan performance for young Millennials.