Spencer Look and Jack VanDerhei: The Assumptions That Can Put Your Retirement at Risk
In this episode of the Morningstar podcast “The Long View” Spencer Look and Jack VanDerhei of the Morningstar Center for Retirement & Policy Studies discuss what truly drives retirement readiness in the United States and why many traditional retirement projections may overlook important risks. Addressing auto portability, VanDerhei argues that expanding access to retirement plans alone is insufficient. He specifically highlights auto portability as an increasingly accepted solution among major recordkeepers and plan sponsors because it helps preserve retirement savings by automatically moving small retirement balances into a worker’s new employer plan rather than allowing accounts to be cashed out or abandoned -- framing auto portability not as a standalone reform, but as an essential building block in a more comprehensive strategy to improve retirement adequacy across the U.S. retirement system.
How Automation Could Lift Retirement Odds for Millions of Workers
Adam Hardy, lead data journalist at Money.com, analyzes an Employee Benefit Research Institute (EBRI) issue brief that modeled the impact of three "automatic" defined contribution features - auto enrollment, auto escalation and auto portability. By itself, the EBRI research finds that auto portability could reduce the retirement savings shortfall (RSS) by 11.4%, and if taken together with the other features "the benefits are compounded."
The plan advisor case for auto portability
Writing in BenefitsPro, Steve Holman, Senior Vice President of Portability Services Network (PSN) Strategy and Development, lays out a compelling case for why retirement plan advisors should be all-in for PSN Auto Portability. In his article, Holman opens by observing that auto portability “strengthens advisors’ value by increasing plan assets and expanding opportunities for wealth management” and proceeds to build on that foundation. “The bottom line” for plan advisors, concludes Holman “is auto portability is not a threat, it’s a growth engine for plan advisors – driving asset retention, increasing AUM, and expanding long-term client opportunities.”
RCH Consolidation Corner Channel Ep. 33 - Will Standardized Forms Fix Retirement System Fragmentation?
In this episode, we examine the issue of utilizing standardized forms to facilitate retirement savings portability. We hope you'll find the audio enjoyable and informative.
PBGC Report Points to a Retirement System Solution that Already Exists
Writing in the Consolidation Corner blog, RCH’s Tom Hawkins draws attention to the Pension Benefit Guaranty Corporation (PBGC)'s recent report to Congress (Feasibility of Expanding PBGC’s Missing Participants Program) which found that converting PBGC's existing program into a national consolidator of small retirement balances would require substantial new systems, resources, and expertise. Importantly, the PBGC report recognizes that private-sector solutions have already emerged to address the problem, indirectly referring to RCH, PSN and auto portability. Consistent with the PBGC’s report, Hawkins concludes: “public policy can support, encourage, and accelerate the development of a comprehensive clearinghouse network that keeps workers connected to their savings throughout their careers.”
Does Portability Services Network preserve retirement savings? Early evidence
New research released by the Vanguard Group (Does Portability Services Network preserve retirement savings? Early evidence) reveals that auto portability delivered through the Portability Services Network (PSN) dramatically reduces retirement savings leakage among workers with small account balances. Vanguard's analysis found that cash-out rates for 401(k) balances under $1,000 fell from approximately 50% before PSN adoption to about 9% after adoption, demonstrating that auto portability is highly effective at preserving retirement savings for workers most likely to cash out when changing jobs. The study also found that PSN is successfully reaching younger, lower-income, and highly mobile workers, the population most vulnerable to retirement leakage. In addition to improving participant outcomes, PSN provides operational benefits for plan sponsors by reducing stranded accounts, uncashed checks, and administrative burdens associated with terminated participants. The report concludes that auto portability shows meaningful early success as retirement-system infrastructure, with the potential for even greater impact as industry participation expands.
A Step Forward, But Will Standardized Forms Fix Retirement System Fragmentation?
Writing in 401k Specialist, RCH’s Tom Hawkins provides his point of view on IRS Notice 2026-49 (Guidance on Section 324 of the SECURE 2.0 Act with Respect to Rollovers), which proposes four model forms and a five-step process designed to facilitate plan-to-plan portability. While Hawkins views the proposed guidance as “a welcome and constructive development” he also makes the case for a market-driven digital infrastructure that would more fully address the problem of systemic friction in our retirement system.
The Plumbing Our Country’s Retirement System Needs
Writing in the RCH Consolidation Corner blog, RCH President & CEO Spencer Williams argues that the U.S. retirement system suffers from costly “leaks” because workers frequently change jobs and cash out small retirement balances rather than keep their savings invested. Using a plumbing analogy, Williams explains that the industry has evolved from basic “one-to-one” transfers to more sophisticated “one-to-many” platforms, but to truly preserve retirement savings it needs a “many-to-many” clearinghouse that allows assets to move seamlessly among plans through shared technology and reciprocal connections. Williams contends that this infrastructure is increasingly important as retirement savings vehicles become more diverse and as public policy initiatives such as the Saver’s Match are implemented. He points to Auto Portability, enabled by the Portability Services Network (PSN), as proof that a true clearinghouse model can operate successfully at scale, helping keep savings in the retirement system, reduce account fragmentation, and improve long-term retirement outcomes.
