Media Coverage

Top 5 Misconceptions About 401k Auto-Portability

Auto portability is a new “automatic” plan feature that is rapidly gaining acceptance by large defined contribution recordkeepers serving almost 10 million participants. While the feature is relatively new, it has received a great deal of attention in the media and has also been the beneficiary of definitive regulatory guidance, promulgated by the Department of Labor (DOL). Despite this, significant misconceptions persist about auto portability, and the top five are presented in 401k Specialist Magazine by RCH's Tom Hawkins, including a link to a short video.

The Top Five Misconceptions About Auto Portability

Auto portability is a new “automatic” plan feature that is rapidly gaining acceptance by large defined contribution recordkeepers serving almost 10 million participants. While the feature is relatively new, it has received a great deal of attention in the media and has also been the beneficiary of definitive regulatory guidance, promulgated by the Department of Labor (DOL). Despite this, significant misconceptions persist about auto portability. The top five misconceptions are presented here, which includes a link to a short video.

Auto Portability Breaks New Ground

Writing for 401kTV.com, Steff Chalk, Executive Director of The Retirement Advisor University (TRAU), notes the recent 9/21/21 announcement by Vanguard and states that "[a]uto portability is gaining ground because of its benefits — the ability to proactively impact cash-out leakage, missing participants and abandoned 401(k) accounts. While the Vanguard/RCH auto portability solution is relatively new, it has the potential to help move the industry forward while simplifying plan administration and improving compliance."

Vanguard Group becomes the second domino to fall

RIABiz's Lisa Shidler conducts an in-depth examination of the important ramifications of the Vanguard Group's 9/21/21 announcement that it will offer the RCH auto portability solution to its clients and their participants. Shidler reaches out to a host of industry experts for their views, which are uniformly supportive of auto portability, and states that other recordkeepers, such as Fidelity "may yet see the wisdom" in adopting the feature. Shidler also extensively quotes RCH President & CEO Spencer Williams for the piece.

A leap forward for auto portability

Greg Long, industry thought leader and head of Alight Solutions' head of Public Policy & Defined Contribution Public Sector, takes to LinkedIn to provide his viewpoint on auto portability. Citing another major recordkeeper's announcement that it's joining the RCH auto portability network, Long takes stock of that positive development, and uses it to advocate for making auto portability "the standard for all small, terminated accounts."

Worried About Losing Your Old 401(k)s? ‘Portability’ Measures Can Help

Yahoo Finance's Mike Obel takes stock of portability measures that could remove roadblocks for Americans "to take along their retirement funds more easily throughout their careers." Obel cites both draft legislation in Congress, as well as Vanguard's 9/21/21 announcement of plans to work with Retirement Clearinghouse on auto portability, which is expected to launch in mid-2022.

Also featured in SmartAsset.com

Vanguard and RCH to offer ‘auto-portability’ service to plan participants

The Editorial Staff of the Retirement Income Journal reports on the 9/21/21 announcement by Vanguard that it will offer the RCH Auto Portability solution to its plan sponsor clients and their participants, targeting the mid-2022 timeframe. The article describes key elements of the announcement, and echoes remarks by RCH President & CEO Spencer Williams by stating that "[t]he deal with Vanguard marks a great leap forward."

How Small Cashouts Can Affect Future Retirement Income

NAPA Net's Ted Godbout reports on new research from Alight Solutions that examines the problem of small account cash outs, and its highly-detrimental effect on retirement income. Whereas 4 in 10 job-changers of all balances cash out, the numbers skyrocket for balances less than $5,000, and when compound interest is considered, the lost retirement income is surprising. Godbout notes that the study highlights new technology, referencing "the emergence of auto-portability programs, such as one offered by the Retirement Clearinghouse."