By Tom Hawkins | March 3rd 2025

Auto portability, delivered via the Portability Services Network (PSN), is revolutionizing retirement savings preservation by addressing the critical challenges of cashout leakage and account fragmentation.

While auto portability’s immediate impact in reducing cashouts is well-documented, new insights reveal another powerful long-term effect: systematic balance consolidation that helps small-balance job-changing participants cross the vital $10,000 savings hurdle, where retirement security becomes self-reinforcing.

But the benefits don’t stop with participants – the preservation and consolidation of small balances benefit the entire defined contribution ecosystem, including plan sponsors, service providers and advisors.

The Cashout Crisis and Auto Portability's First Line of Defense

Every year, 14.8 million defined contribution (DC) plan participants will change jobs, facing critical decisions about their retirement savings. 31% of these job-changers will cash out their retirement savings completely, producing $92.4 billion in annual cashout leakage.

For the 6.2 million job-changers with balances under $7,000, the outcomes are worse:

  • 72.6%, or 4.2 million will cash out their savings – either through “fast leakage” occurring at the time of separation, or through “slow leakage” that takes place over time
  • Only 27.4% will preserve their savings, with half of those finding their balances stranded in a low-growth safe harbor IRAs

Auto portability flips this equation by making consolidation the default path, where preservation rates jump to 70% and cashouts drop by 58%, compared to baseline.

The $10,000 Hurdle: Where Cashout Behavior Moderates

As everyone knows, saving for retirement is a journey, and is influenced by a myriad of decisions made throughout one’s working career. Preserving retirement savings is not a “one and done” proposition; instead, there are important milestones along the way.

One such milestone that industry research identifies is the attainment of a $10,000 plan balance, where:

  • Participants become 3x more likely to preserve savings during job transitions
  • Account growth through compound returns becomes geometrically significant
  • Financial advisors begin recognizing accounts as "serious" retirement assets


Through a combination of savings preservation, consolidation and the effects of compounding, auto portability helps small-balance job-changers reach this important milestone more quickly, and in much greater numbers.

The Compound Effect of Auto Portability

Utilizing the Auto Portability Simulation (APS), we followed a “class” of 100 small-balance job-changers through their first 10 years in the defined contribution system.

Without auto portability, only 5% of these job changers reached this threshold in the 10-year period, even when you include the relatively few amounts left scattered behind in multiple DC plan accounts.

However, under the widespread adoption of auto portability, 36% of these participants achieved 100% consolidation of their balances after 3 job changes, winding up with an average balance that cleared the $10,000 hurdle. Assuming these participants began saving at age 25, their balance will be worth $70,450 at age 65.

Table 1: Effects on a “Class” of 100 Small-Balance Job-Changers










“Graduating” From Preservation to Wealth Creation

Auto portability's true innovation is its ability to help participants “graduate” from requiring auto portability’s damage control features, and to move into true wealth generation, where they become lifelong retirement savers.

The effect of auto portability’s wealth creation on the entire retirement ecosystem cannot be underestimated. While legacy processes have produced large numbers of retirement dropouts, auto portability will yield healthy savers.

This wealth generation benefits DC recordkeepers, asset managers, plan advisers and plan sponsors. Visit the Auto Portability Plan Calculator to understand how much auto portability can benefit practically any population of retirement savers over the long haul.

As auto portability’s adoption accelerates, we'll soon witness the emergence of a more resilient DC system – one where portability serves as the foundation for lifetime financial wellness rather than simply acting as a cashout leakage stopgap.

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