Auto Portability's Regulatory Framework

Auto portability is a new plan feature that works in tandem with the pre-existing legal and regulatory framework allowing for the automatic rollover of terminated participants’ balances under $5,000, increasing to $7,000 effective 12/31/23.

Additionally, auto portability is made possible by two regulatory actions by the Department of Labor. In November 2018, the DOL issued Advisory Opinion 2018-01A, and in July 2019 the DOL issued Prohibited Transaction Exemption (PTE) 2019-02. Combined, the DOL action provides legal guidance for plan sponsors and guardrails for consumer protections that enable the widespread adoption of auto portability.

Links to the two, finalized documents are provided below:

Advisory Opinion 2018-01A

Advisory Opinion 2018-01A

Prohibited Transaction Exemption 2019-02

PTE 2019-02

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