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401(k) cash out leakage blog posts
Auto Portability is an Easily Quantifiable Solution for Helping Participants Achieve Financial Wellness
In his latest article in RCH’s Consolidation Corner, CEO Spencer Williams addresses the conundrum facing employers, who are committed to promoting their employees’ financial wellness, but also face the grim reality of excessive retirement savings leakage, exacerbated by the COVID-19 pandemic. By adopting auto portability, Williams contends that plan sponsors can “easily quantify their financial wellness efforts” while getting out in front of cashout leakage.
Cracking the Code to True 401(k) Portability
America’s 401(k) system, long plagued by friction, produces $92.4 billion of excessive cash-out leakage annually. In recent years and culminating in 2021, the private sector has finally “cracked the code” and is delivering innovative fintech solutions, combined with education and personal assistance to reduce friction and to enable true 401(k) portability.
Consolidating the Gains from a Program of Retirement Savings Portability
Following on to the 2013 study by Boston Research Group (now Boston Research Technologies), a new study released by Retirement Clearinghouse (RCH) revisits a mega plan sponsor’s ongoing experience with a program of 401(k) retirement savings portability, and finds that not only have the benefits of the original program persisted, they’ve grown, with plan participants continuing to realize significant, measurable benefits.
Auto Portability Is, And Always Will Be, A Bipartisan Solution
RCH President & CEO Spencer Williams, writing in Consolidation Corner, addresses the consistent bipartisan support that auto portability has enjoyed in DC. This support, writes Williams, transcends party affiliation, extending across multiple Presidential administrations as well as both legislative branches of the U.S. Congress, and falls squarely in-line with policy initiatives that advance the interests of minority and low-income workers. Williams provides readers with an impressive, years-long list of actions & endorsements that reflect auto portability's broad-based support, which culminated last year with the nationwide rollout of the program.
Nudge Theory can Help Sponsors Strengthen Financial Wellness Initiatives
In his latest post on RCH’s Consolidation Corner, President & CEO Spencer Williams examines the potential applicability of “nudge theory” by plan sponsors to promote 401(k) account consolidation and to discourage premature cashouts. Nudges, which are “easy and cheap” interventions, could include simple and subtle messages to participants that Williams asserts “can make a big difference to the retirement preparedness, and overall financial health, of their plan participants.”
How Sponsors can Facilitate Better Participant Outcomes and Improve Plan Metrics in 2021
Writing in the Consolidation Corner blog, RCH President & CEO Spencer Williams offers 401(k) plan sponsors two New Year's resolutions that could improve participant outcomes and boost plan metrics. Specifically, Williams suggests that plan sponsors 1) implement a robust missing participant search program and 2) eliminate the practice of automatic cash-outs. Fortunately, adds Williams, both of these resolutions can be achieved when plan sponsors embrace an auto portability program.
Three New Year's Resolutions for Plan Sponsors to Consider
Writing in Consolidation Corner, RCH EVP Neal Ringquist offers retirement plan sponsors three New Year's resolutions that, if adopted, will facilitate retirement savings portability and make 2021 a better year for the plan as well as for its participants.
Bringing Sunlight to the Dark Corners of Safe Harbor IRA Fees
Safe harbor IRAs exist due to the success of 401(k) plans, combined with the propensity of America’s mobile workforce to change jobs. While safe harbor IRAs have helped plan sponsors mitigate their cost and risk associated with small accounts, they’ve failed miserably for former participants. In his latest article in RCH’s Consolidation Corner, Tom Hawkins focuses sunlight on the unsavory practice of excessive safe harbor IRA fees, and offers advice to plan sponsors for promoting greater fee transparency and disclosure.
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