News

Safe-harbor IRAs don't offer a long-term saving solution

Writing in Employee Benefit News, RCH and PSN President & CEO Spencer Williams reflects on the 20-year history of safe harbor IRAs, which were intended to be "a temporary solution to the problem of too many small, stranded accounts in defined contribution plans." Williams provides readers with examples of the dysfunction that has occurred when safe harbor IRAs have failed to act as long-term repositories of savings, or worse, when participants cash out completely. With the advent of auto portability, Williams maintains that the new auto feature will "allow participants to maximize the time retirement savings are invested in their plan accounts—and minimize the time those balances are languishing in underperforming safe-harbor IRAs along the journey to retirement."

After 50 years of milestones, the retirement industry is bracing for yet more innovation

Writing in BenefitsPRO on the occasion of National 401(k) Day, Retirement Clearinghouse (RCH) and Portability Services Network (PSN) President & CEO Spencer Williams takes the long view -- looking back at the 50 years that have elapsed since the passage of ERISA in 1974. As Williams writes, "[m]uch has been accomplished over the previous 50 years, and more innovation is on the horizon" while proceeding to describe the "long and winding road" of innovations that have led to present day. The accumulation of innovative features, asserts Williams, has positioned the industry for the adoption of auto portability, where "people really can take their benefits with them from job to job, and keep their retirement savings vested."

Retirement Clearinghouse Releases Saver’s Match Resources

401k Specialist's Amanda Umpierrez reports on the news that Retirement Clearinghouse (RCH) has launched two new Saver's Match resources. Umpierrez writes: "[t]he resources will offer plan sponsors, plan providers and participants consolidated information about SECURE 2.0’s Saver’s Match program, as well as the Saver’s Match Estimator, a new tool that will calculate an estimated matching contribution under the program." Umpierrez also notes that, "according to a March report by the Employee Benefit Research Institute (EBRI), nearly 22 million Americans could qualify for the Saver’s Match provision in SECURE 2.0, which will take effect in 2027."

Two Saver’s Match Resources Now Available

In their 8/29/24 Product & Services Launches report, PLANSPONSOR writes that Retirement Clearinghouse (RCH) has "launched two new Saver’s Match resources that offer plan sponsors, plan providers and participants consolidated information about the Saver’s Match, as well as a new saver-focused tool—the Saver’s Match Estimator—which will calculate an estimated matching contribution under the program."

Also featured in PlanAdviser

The Risky Business of Cashing Out Plan Balances Below $1,000

Writing in 401k Specialist, RCH's Tom Hawkins examines the “risky business” of automatically cashing out sub-$1,000 balances of separated participants. Hawkins writes that the practice, “may seem like an expedient approach to rid a plan of small balances” but “carries undesirable side effects for both the plan and for its participants” including uncashed distribution checks and unnecessary cashout leakage. The best approach, continues Hawkins, is to “adopt auto portability, which delivers all of the benefits but none of the flaws of old-school automatic rollovers.”

The Scramble to Make the Saver’s Match Work

PlanAdviser's Alex Ortolani reports on the increasing attention being paid to the Saver's Match program as the 2027 target date for the measure's implementation draws closer. Industry groups such as the Pew Charitable Trusts and the Bipartisan Policy Center, acknowledge there could be issues for the program in addressing "the plumbing with recordkeepers." Ortolani turns to RCH CEO Spencer Williams, who indicates that the Saver's Match program could benefit from auto portability technology being deployed by the Portability Services Network, stating that the "utility can be modestly tweaked so the U.S. Treasury can....identify a taxpayer, select a dollar amount and get the money into their plan. At the end of the day, you have to move the money to make it work.”

SECURE 2.0’s Saver’s Match: The Promise and The Challenges

Writing in 401k Specialist, RCH's Tom Hawkins takes stock of the Saver's Match program, slated to begin operation with the 2027 tax year. While research is still ongoing, Hawkins notes that the picture being revealed is one of massive potential to increase retirement savings and to help close the minority wealth gap. These benefits may not come easily, given the sheer size of the population affected by the Saver’s Match, and the challenges that the program could face in getting up-to-speed. At the Annual iOme Challenge Forum, held on 6/20/24 by the Women’s Institute for a Secure Retirement (WISER), RCH & PSN President and CEO Spencer Williams, along with Morningstar’s Jack VanDerhei, outlined both the promise and the challenges represented by the Saver’s Match.

Upcoming Trends in Plan Design: From the Perspective of a Retiring Plan Sponsor

PLANSPONSOR's Remy Samuels reflects on the pending retirement of Carl Gagnon, assistant vice president of global financial well-being and retirement programs at Unum Group, and "[k]nown for innovative plan design ideas and offering a wide swath of benefits to his employees." In recounting his legacy of innovation, Samuels notes that Unum Group has elected to adopt auto portability, as delivered by the Portability Services Network. "We think that’s going to be extremely attractive to our new hires,” Gagnon says. “We’re trying to make it easier for our employees to consolidate their assets into one plan and into one company so they can manage it all.”