Public Policy

PSCA Executive Report Recaps Senate HELP Committee Hearing

PSCA's Executive Report provides its plan sponsor membership with highlights from the 3/29/22 U.S. Senate HELP Committee's hearing on improving retirement security. The hearing featured testimony from Cindy Hounsell, President and Founder of the Women’s Institute for a Secure Retirement (WISER), and Ida Rademacher (The Aspen Institute), who both addressed the need for improved retirement savings portability. Hounsell's testimony referenced three interventions that could help, including "auto-portability to help prevent workers who change jobs from cashing out their retirement savings. "

Senate HELP Committee to Act on Retirement Security Legislation

NAPA Net's Ted Godbout covers the 3/29/22 U.S. Senate HELP Committee's hearing on improving retirement security. The hearing featured testimony from Cindy Hounsell, President and Founder of the Women’s Institute for a Secure Retirement (WISER), and Ida Rademacher (The Aspen Institute), who both addressed the need for enhanced retirement savings portability. Hounsell's testimony referenced three interventions that could help, including "auto-portability to help prevent workers who change jobs from cashing out their retirement savings. "

Also featured in ASPPA Net

Auto Portability May Help Manage Fiduciary Risk

Writing for 401kTV, Steff Chalk, Executive Director of The Retirement Advisor University, examines the perspective offered by RCH President & CEO Spencer Williams, whose recent article in BenefitsPro suggests that the Hughes v. Northwestern University ruling could expose plan sponsors to fiduciary risk related to excess cash-out leakage. Since auto portability acts to preserve retirement savings, Chalk writes that "auto portability may be making a grand entrance" and the recent developments "appear to make auto portability solutions worthy of sponsors’ consideration."

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

Toward a Sustainable and ‘Greener’ 401k System

Writing in 401k Specialist, RCH’s Tom Hawkins reacts to the DOL’s 2/14/22 Request for Information (RFI) seeking comment on ways to “protect life savings and pensions from threats of climate-related financial risk.” Hawkins contends that our retirement system itself has significant sustainability problems that are more financially material to future retirees than climate change. Hawkins urges action to address the 401(k) system’s inefficiency and waste, which could “produce more of the ‘green’ that will matter to future retirees.” Hawkins notes the findings of a recent Brookings Institution report on the problem of small retirement accounts, which recommends improvements in “combining accounts” and includes support for auto portability.

Long Overdue, Pension Auto Portability Is Coming

Writing in the Pension Research Council's (Wharton School, Univ. of Pennsylvania) RetireSecure Blog, Michael Kreps of the Groom Law Group offers his considered view on auto portability, which Kreps believes "is likely to have an enormous impact on the US retirement system" by reducing cashout leakage and consolidating retirement savings. In the piece, Kreps cites a variety of industry statistics and projections, concluding that auto portability "will undoubtedly preserve many small accounts, making retirement more secure for millions of people."

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)

What happened to auto-portability?

Writing in BenefitsPro, David Baumann recaps a 1/6/2022 report by the Aspen Institute that identified a compelling need for portability, yet "more than 40 years after a presidential commission recommended making retirement programs more portable, policymakers are still struggling with the issue." Baumann notes that the Aspen Institute's paper cited a number of key factors making the case for auto portability, including: 1) the propensity of American workers to change jobs, 2) to cash out following a job change, and 3) an EBRI survey finding that "85% of retirement savers would find automatic transfers between programs valuable." Baumann also noted that "[a]n Aspen survey of retirement experts found that 57% supported a mandate" for auto portability, while 48% of the same experts believed that auto portability was feasible without a mandate.