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Retirement Clearinghouse in the News
Find news articles referencing RCH and our services, including Auto Portability
EBRI Issue Brief #550: Auto Portability’s Massive Incremental Benefits to Pending Legislation
EBRI Issue Brief #550, released 1/20/22, examines the effects of various public policy initiatives, including an Automatic Contribution/Plan Arrangement (ACPA), an enhanced saver's credit, a "skinny" 401(k), and a student loan debt employer match. Importantly, the EBRI study noted the massive, incremental effects of auto portability, when added to the ACPA and Saver's Credit, where it reduced overall retirement deficits by 11% to 14%, depending on race.
How to ‘Materially Reduce’ Retirement Savings Deficits Across Races
401k Specialist Editor-in-Chief John Sullivan examines the latest Issue Brief from the Employee Benefit Research Institute (EBRI), which assesses the impact of recently-proposed changes to the retirement system and how they could shrink retirement deficits. Sullivan notes that "combining automatic contribution provisions with an enhanced Saver’s Credit in 401ks and DC plans would reduce retirement savings shortfalls by 17% to 26%, depending on race" adding that "the addition of auto portability of retirement accounts resulted in a further double-digit reduction in savings shortfall across all races examined."
National Urban League, NAACP Endorse 401k Auto Portability
Robert L. Johnson, Founder and Chairman of The RLJ Companies and majority owner of Retirement Clearinghouse (RCH), has secured endorsements for auto portability from two premier civil rights organizations – the National Urban League, and the National Association for the Advancement of Colored People (NAACP) – both with over a century of experience advocating for solutions that address the inequities and economic challenges experienced by Black Americans and by other communities of color. Writing in 401k Specialist, RCH's Renée Wilder Guerin, Executive Vice President, Public Policy, summarizes these major developments.
You have more access to your 401(k) than you think — and that’s not always a good thing
Alicia Munnell, director of the Center for Retirement Research at Boston College and writing in MarketWatch, examines the phenomenon of 401(k) leakage, and considers the balancing act between preserving savings for retirement, vs. allowing access to savings for participants who need their money. Munnell identifies the "really annoying and large source of leakage is people cashing out when they change jobs" and, in an ideal world, would prefer to "prohibit cashing out at job changes entirely." More practically, Munnell suggests that RCH's auto portability program, "a platform for automatically transferring balances under $5,000 from an old plan to a new plan" could coexist with "a system with standardized forms and procedures for balances of all sizes."
4 Reasons Why 401k Auto Portability is Inevitable
Writing in 401k Specialist, RCH's Tom Hawkins offers an optimistic assessment of the prospects for auto portability. Hawkins, a self-confessed "long-time, unabashed proponent" of auto portability, has recently concluded that the feature's eventual, widespread adoption is "inevitable" and supports his position with four key points.
The Aspen Leadership Forum on Retirement Savings
In a publication released 1/6/2022 as part of the Aspen Institute's Financial Security Program, the 2021 Aspen Leadership Forum on Retirement Savings Report is a summary of the April 2021 Aspen Leadership Forum on Retirement Savings. The Forum's report devotes a page to "Six Stats That Tell the Portability Story" which notes the propensity of American workers to change jobs and to cash out. It also mentions two compelling statistics: 1) that 85% of participants like the idea of automatic portability and 2) that 57% of retirement experts supported a government mandate for auto portability, while almost half (48%) believed that automatic portability was feasible without such a mandate.
The retirement crisis: where do we stand?
Robert Powell, writing in MarketWatch, takes stock of the retirement crisis and turns to Tony Webb, formerly a senior research economist at the Center for Retirement Research at Boston College, and now an affiliated researcher with the Schwartz Center for Economic Policy Analysis at The New School. Webb recounts a meeting years ago with RCH's Spencer Williams and Tom Johnson during the formative stages of auto portability. Recalling that meeting, Webb notes that Williams and Johnson “had an idea for automating the transfer of 401(k) plan balances from one plan to another” and described the pair as “the men in white hats, trying to do good.”
EBRI's Lori Lucas Featured in Retirement Management Journal
EBRI's CEO Lori Lucas is featured in the current issue of Retirement Management Journal in an article entitled: “The Visionaries Series – Lori Lucas, CFA – The Economic Importance of Employee Benefits for Americans Financial Security.” In the wide-ranging piece, Lucas is interviewed by RMJ editor-in-chief Robert Powell, along with Stacy Schaus, founder & CEO of Schaus Group LLC. Lucas explains EBRI's efforts to bring clarity to the problem of cashout leakage, as well as their ongoing efforts to analyze the impact of auto portability on preserving Americans' retirement savings.
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