Small 401(k) Balances Remain at Risk Despite Progress on Auto Portability
401kTV's Fred Barstein examines recent research on traditional safe harbor IRAs, revealing ongoing problems with disengaged accountholders. The article highlights encouraging progress for Portability Services Network (PSN) and auto portability, showing that the program is significantly reducing retirement savings leakage when workers change jobs. In Vanguard plans participating in PSN, cash-out rates for departing employees with balances under $1,000 fell from roughly 50% to just 9%, demonstrating the effectiveness of automatically preserving retirement assets. While broader industry adoption and participant matching remain challenges, the story underscores that auto portability is already helping keep more Americans connected to their retirement savings and has the potential to deliver even greater results as participation expands.
Small 401(k) balances erode after job changes, new research shows
InvestmentNews Senior Journalist Leo Almazora examines new research from Vanguard that examines early-stage auto portability results as well as a report produced by PensionBee on the number of safe harbor IRAs. Almazora notes Vanguard's finding that auto portability has had a significant, positive effect on reducing cashout leakage, but that account matching lags as the Portability Services Network continues to add plan sponsors.
Don’t Let a Forgotten 401(k) Shrink Your Future
Craig Copeland, Ph.D., Director of Wealth Benefits Research at the Employee Benefit Research Institute, is interviewed by Broadcast Retirement News (BRN) anchor Jeff Snyder, to discuss EBRI's latest research on the growing volume of safe harbor IRAs. Copeland estimates there to be from 10-20 million safe harbor IRA accounts, amounting to roughly $30 billion in assets, which typically earn very little investment return, while being subject to ongoing administrative fees. To address the problem, Copeland, referencing the Portability Services Network (PSN), states: "there is [an] auto portability program that’s been established and...is available to be used through this process. And it has to go through the IRA and, and then there’s....a network of record keepers that can join to make this a fully automated process."
The Pension Protection Act at 20: Defaults Built for a Job You Keep
In his 20th anniversary review of the Pension Protection Act, Jack VanDerhei, Director, Morningstar Center for Retirement & Policy Studies, argues that automatic enrollment and escalation transformed retirement saving by making participation and increasing contribution rates the default experience for workers. The article highlights auto portability as an important extension of that default-based approach. By automatically moving small retirement accounts from a former employer's plan into a worker's active plan, auto portability helps reduce cashout leakage and preserve savings continuity across job changes. VanDerhei suggests the next evolution may be making contribution rates portable as well, allowing retirement-saving momentum to follow workers from one job to the next.
Automatic 401(k) rollovers reduce cash-outs, research finds — but few accounts reach new employer plans
CNBC personal finance reporter Sarah Agostino examines auto portability (as delivered by the Portability Services Network), citing recent research from Vanguard showing that auto portability reduces cashout leakage. Agostino turns to RCH's Steve Holman, SVP, PSN Strategy and Development to provide context as auto portability adoption continues to expand. Holman explains that "there have been 53,118 completed transactions, totaling $71.3 million in assets transferred from a previous employer plan to a new employer plan via auto portability."
4 reasons defined contribution recordkeepers adopt auto portability
Writing in BenefitsPRO, Steve Holman, SVP of PSN Strategy & Development, lays out the case for auto portability from the perspective of defined contribution recordkeepers. Holman identifies four important reasons why auto portability is beneficial, including 1) delivering a positive ROI, 2) differentiating their value proposition, 3) industry collaboration & reciprocity and 4) strengthening the DC system by addressing the small account problem at scale. “Auto portability” concludes Holman, “is not simply an operational enhancement – it is a foundational capability for the future of defined contribution plans.”
The Future of Retirement Savings Portability Requires More Than Automation
Writing in the Consolidation Corner blog, RCH’s Tom Hawkins offers his take on the retirement industry’s responses to IRS Notice 2026-49 (Guidance on Section 324 of the SECURE 2.0 Act with Respect to Rollovers), which proposed four model forms and a five-step process designed to facilitate retirement savings portability. Hawkins is encouraged “that a growing number of industry stakeholders recognize that solving these challenges requires a more coordinated infrastructure approach” which he describes as “an important validation of a philosophy that has guided [RCH’s] work for nearly two decades."
Industry Demonstrates Need for Better Retirement Savings Rollover Support for Job Changers
PLANSPONSOR's Emily Boyle addresses recent research from Empower (The Retirement Drift) which lays out their analysis of “left-behind” fragmented accounts and the mobile workforce. Boyle also highlights recent research from Vanguard (Does Portability Services Network preserve retirement savings? Early evidence) which analyzes early results from PSN Auto Portability, indicating that "auto portability through PSN significantly cut cashout rates for balances of less than $1,000 from about 50% to approximately 9%."
