News

The Retirement Industry 2024

Writing in the November-December 2024 edition of PLANSPONSOR Magazine, Beth Braverman examines "the biggest trends and innovations of 2024" and quickly focuses on the progress made this year by auto portability, as delivered by the Portability Services Network (PSN). Braverman quotes research by RCH estimating that auto portability could preserve $1.6 trillion in retirement wealth, and showcases interim adoption statistics from September 2024 indicating that the PSN network "had signed up more than 6,000 plans, representing over 2.2 million active participants."

Treasury, IRS Advised for Simplicity, Public Push on Saver’s Match

PLANSPONSOR's Alex Ortolani takes stock of the most impactful responses provided to the US Treasury and IRS request for comment (RFC) regarding how to best implement the Saver’s Match program. Ortolani summarizes key feedback from industry groups, and features the response supplied by Retirement Clearinghouse and Portability Services Network President & CEO Spencer Williams. Ortolani writes: "Retirement Clearinghouse, which oversees the Portability Services Network of recordkeepers, made the case that the piping for its portability network could be used for the Saver’s Match for both in- and out-of-network recordkeepers."

7 Things Retirees Can Be Thankful for This Year

Kate Stalter, who serves as an investment advisory industry expert for U.S. News & World Report, identifies the top 7 things that retirees can be thankful for this year. In her all-star lineup, she identifies 401(k) auto portability for special gratitude, and turns to Said Israilov, CFP and wealth advisor, who states: "[m]ajor record keepers like Fidelity and Vanguard have been implementing this technology to address a significant issue" in the form of excessive cashout leakage, adding "in 2025, more employers are expected to adopt this feature in their retirement plans, making it easier for workers to maintain and grow their retirement savings as they change jobs."

Also featured in MSN

Is It Time to End the 401(k)?

Writing in Think Advisor, Melanie Waddell addresses the controversial stance taken by academic Shlomo Benartzi, who blasts the 401(k) system's lack of portability, pointing to the Australian model as worthy of consideration for replacing 401(k) plans. Other industry observers are not too keen on Benartzi's idea, including Nevin Adams, who cites the Portability Services Network's embrace of auto portability, which "already connect[s] a half dozen of the nation's leading recordkeepers to facilitate exactly the type of job-to-job plan transfer Benartzi seems to think only a centralized government pool could accomplish."

Et tu, Shlomo?

Nevin Adams, writing in NAPA Net, takes on a leading behavioral science academic, Shlomo Benartzi, for his advocacy of "creating big government-run pools of retirement savings — where ALL retirement savings would be put." As a viable alternative to this "truly scary idea" Adams cites auto portability, noting that it's "an emerging capability — via networks like the Portability Services Network that already connect a half dozen of the nation’s leading recordkeepers to facilitate exactly the type of job-to-job plan transfer Benartzi seems to think only a centralized government pool could accomplish."

Job Changes Could Cost You $300K in Retirement Savings

Mary Helen Gillespie, writing in TheStreet, covers research recently released by Vanguard, revealing "that frequent job changes can lead to significant retirement savings losses" when job-changers' savings rates decline. Gillespie notes that the Vanguard study advocates investigating "the expansion of automatic portability via the Portability Services Network to include additional data feeds regarding the participant’s saving rate at their prior employer. This also could enable savings elections to transfer from plan to plan without participant engagement."

Pointers For Maximizing Clients' 401(k) Contributions

Writing in Financial Advisor, Ben Mattlin examines approaches for maximizing clients' 401(k) contributions. Mattlin notes that "job-hoppers" can often experience decreased savings rates following a job change, and quotes Vanguard's Kelly Hahn, head of retirement research at the firm. Mattlin cites Vanguard research that -- referencing auto portability -- advocates for "tech-enabled solutions such as the utility offered by the Portability Services Network, which uses a digital hub from the Retirement Clearinghouse that connects plan record-keepers with plan sponsors nationwide."

What You NEED to Know About Auto Portability: ASPPA Annual 2024

Reporting from the 2024 ASPPA Annual Conference, ARA's John Sullivan recaps a breakfast session, where Fidelity Investments’ TPA Programs Director Beth Robinson offered her perspective on auto portability, as delivered by the Portability Services Network. Robinson addressed the problems of cashout leakage, frequent job-changes and systemic friction that stand in the way of preserving small balances, a problem that disproportionately affects underserved and under-saved demographics. Robinson also offered attendees a primer on how auto portability works, including participant communications and the subsequent commencement of network locate-and-match processes.

Also featured in NAPA Net and in PSCA News