Auto Portability - Public Policy
Learn more about retirement savings public policy positions related to Auto Portability.
Pairing 401(k) Savings Preservation and Expanded Access for America’s Minorities
In this article, RCH's Spencer Williams and Tom Hawkins address an important retirement public policy question: How would a pairing of auto portability with open multiple employer plans (or “open MEPs”) impact the retirement savings of America’s minorities, and particularly, African-Americans?
Auto-Portability, Universal Coverage Would Reduce Retirement Shortfall
PLANSPONSOR's Lee Barney addresses new research released by EBRI, which models the effects of the Automatic Retirement Plan Act of 2017 (ARPA), and then combines ARPA with auto portability. The EBRI research reveals that if ARPA were to be combined with auto portability, the retirement savings shortfall (RSS) would dramatically reduce the $4.3 trillion deficit by $932 billion, or 22.6%.
US sends ‘myRA’ accounts to Retirement Clearinghouse
On 8/9/18, the Editorial Staff of the Retirement Income Journal reported that the Treasury Department will transfer remaining, unmoved assets from the myRA program (discontinued in 2017) into Roth IRA accounts at Retirement Clearinghouse (RCH). The article references the notice posted on the myRA.gov website, which provides current myRA accountholders with instructions on how to withdraw or transfer their balances prior to the deadline of August 31, 2018, as well as providing information about going-forward arrangements for account balances that are moved to RCH. Also highlighted are RCH's ongoing efforts to obtain regulatory approval for auto portability, a clearing system that will "automatically transfer 401(k) assets....when a participant changes jobs."
Understanding and Solving the Problem of Women’s 401(k) Cashout Leakage
At a May 22nd, 2018 Women's Institute for a Secure Retirement (WISER) roundtable, Retirement Clearinghouse (RCH) EVP Tom Johnson debuts new women's 401(k) cashout leakage statistics. This important new data highlights the challenges that women face in preserving their small-balance 401(k) retirement savings when changing jobs, and also points to the promise of auto portability to preserve these savings in order to achieve higher balance levels, where more virtuous behaviors can prevail.
America’s modern 'throwaway': 401(k) retirement savings
In his article in BenefitsPro, RCH’s Tom Hawkins draws attention to the modern-day waste that occurs when 401(k) participants change jobs and prematurely cash out their retirement savings. Similar to America’s post-World War II “throwaway” culture which gave rise to modern recycling initiatives, Hawkins argues that the solution to 401(k) cashout leakage is auto portability, and predicts that it will catch on as key stakeholders acknowledge the severity of the problem, accept responsibility for solving it and act collaboratively to hasten auto portability’s widespread adoption.
2 Important Retirement Plan Initiatives Moving Forward
With "Rothification" in the rear-view mirror in 2017, retirement savings policymakers have begun turning their attention to other, more-promising initiatives in 2018 -- namely, auto portability and missing participants.
Two Retirement Public Policy Initiatives Moving Forward in 2018
Two retirement savings public policy initiatives – auto portability and the problem of missing participants – are very likely to see significant progress in 2018. Both initiatives enjoy strong bipartisan support, promise to streamline and strengthen America’s defined contribution system, and will preserve the retirement savings of millions of Americans by ensuring that their savings move forward when they change jobs.
Could this simple proposal help boost retirement savings?
In his 1/8/18 article in the Journal of Accountancy, Lou Carlozo examines auto portability, which has the potential to "impact the retirement plans of millions for the better." Carlozo details the progress auto portability is making with the Department of Labor, referencing the July 2017 letter from Senate Republicans. Carlozo extensively quotes RCH President & CEO Spencer Williams, as well as other industry experts, on the positive outlook for auto portability and its potential for solving the 401(k) "leakage" problem.
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