News

Transforming Retirement Savings with Auto Portability (Ep.50)

In episode 50 of The 401(k) Marketing Podcast, 401(k) Marketing's Rebecca Hourihan sits down with RCH's Spencer Williams and Neal Ringquist for a wide-ranging discussion on the "fascinating journey of auto portability from concept to critical mass." The three discuss the role of the Portability Services Network (PSN) and its collaboration with major record keepers, how shifting demographics and technology are reshaping retirement savings behavior, navigating the mechanics of auto portability, and exploring the significant impact of auto portability on underrepresented communities and in reducing cash-out leakage.

Recordkeepers Are the Key to PSN Auto-Portability

Writing in PLANSPONSOR, RCH & PSN President Spencer Williams provides readers with a unique point-of-view on how auto portability works, from the perspective of industry adoption. Citing PSN's "remarkable success in its first year" with over 15,000 plans choosing to adopt the service, Williams describes the roles of recordkeepers and employers in stoking auto portability's accelerating adoption. Williams' piece also focuses on the importance of reciprocity between recordkeepers, regulatory compliance, cybersecurity and accountability -- and observes that "PSN auto portability is a balanced, complex, integrated and interdependent system."

Auto Portability Updates: What Plan Sponsors Should Know

A PNC Bank Insights article provides their corporate client base with a succinct and positive overview of auto portability, as delivered by the Portability Services Network (PSN), with technology provided by Retirement Clearinghouse (RCH). The PNC piece addresses key facts that plan sponsors should know, and lays out a list of key auto portability benefits.

Automated features in workplace retirement plans can close savings shortfalls

Pensions & Investments reporter Margarida Correia recaps the latest retirement research from EBRI, which examines the impact of key "automatic" features utilized in defined contribution retirement savings plans. Correia notes that the EBRI report indicated the combination of "automatic enrollment, automatic escalation and automatic portability -- the retirement saving shortfall would close by 16%."

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EBRI Analysis Tool Highlights Impacts of Automatic Enrollment

Amanda Umpierrez, writing for 401k Specialist, covers the release of EBRI Issue Brief 630, which examined the impact of automatic features in retirement plans by using its Retirement Security Projection Model (RSPM). Umpierrez notes that the analysis looked at several automatic features -- including automatic enrollment, automatic escalation and automatic portability. She writes that automatic portability "can significantly lower shortfalls for participants" and that "pans who adopt auto-portability features could see a reduction in the retirement saving shortfall by over 11% for those ages 35 to 39."

How 401(k) Plans Benefit From Auto Portability

Angela Capek is product area leader of defined contribution (DC) product platforms at Fidelity Investments, and has worked for Fidelity for 28 years in various roles focusing on product development and deployment for DC retirement plans, for which Fidelity serves as recordkeeper. Capek recently sat down with Russ Alan Prince of Financial Advisor Magazine to discuss how the auto portability solution has helped employer-sponsored DC plans make it easier for their participants to consolidate their 401(k) savings and keep their savings invested in the U.S. retirement system as they change jobs.

ERISA and Auto Features: An RSPM® Analysis of the Impact of Automatic Features on Retirement Security

The Employee Benefit Research Institute (EBRI) released Issue Brief No. 630, authored by Craig Copeland, Ph.D. The analysis utilizes EBRI's Retirement Security Projection Model (RSPM), which focuses on the impact of key "automatic" features, including auto enrollment, auto escalation -- and more recently -- auto portability. For auto portability, EBRI's analysis reveals that, in the 100% adoption scenario, there is an 11.39% reduction (improvement) in the retirement savings shortfall for the ages 35-39 cohort, and correspondingly, a 3.51% improvement in the retirement readiness rating for the same cohort.

Preventing Leakage and Improving Retirement Security: The Impact of Auto-Portability

Financial Advisor IQ writer Ellen Sheng, in her fourth article of Financial Advisor IQ's five-part special report on the impact of Secure Act 2.0 on financial advisors, examines the problem of leakage and the role of auto portability. Sheng turns to several prominent advisory professionals, all of whom voice positive views on auto portability's prospects. Sheng summarizes by writing: "[w]hile auto-portability is still fairly new, advisors are optimistic about the development. "

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