On Earth Day, Consider Auto Portability to ‘Recycle’ 401(k) Savings
On April 22nd, we celebrate the 56th annual Earth Day, and
that gives RCH’s Tom Hawkins the opportunity to consider how the concept of
recycling applies to our nation’s 401(k) system, which Hawkins characterizes as
having a “waste problem” that manifests in the form of excessive cashout
leakage and stranded accounts. By contrast, auto portability represents a
sustainable solution that ‘recycles’ small-balance accounts, and its adoption
is rapidly accelerating via members of the Portability
Services Network (PSN).
Retirement Industry People Moves
PLANSPONSOR's Emily Boyle, covering significant people moves in the retirement industry, reports that "Steve Holman joined [RCH] as Senior Vice President of the Portability Services Network Strategy and Development, reporting to Neal Ringquist, RCH’s executive vice president and chief revenue officer. Holman will be responsible for accelerating plan sponsors’ adoption of automatic portability." Boyle also notes Holman's prior service as board member of PSN, representing Vanguard.
Ringquist Brings a PSN Ally into RCH
The 401kWire's Selma Khenissi covers RCH's recently announced hiring of Steve Holman, formerly of Vanguard, to serve as the Senior Vice President of Portability Services Network (PSN) Strategy & Development, reporting to Neal Ringquist, EVP & Chief Revenue Officer. According to the piece, Holman's role is to accelerate the adoption of auto portability, and his prior role with Vanguard and service on the PSN board uniquely positions him for success. Khenissi includes quotes from Ringquist, RCH's President & CEO Spencer Williams, as well as Holman, what states that "PSN Auto Portability is the long-awaited solution for closing our country's retirement savings gap."
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Millions lose track of their retirement savings. This plan wants to change that
EBN's Jimmy Nesbitt investigates the recent RCH whitepaper advocating for building out retirement industry clearinghouse infrastructure, and turns to author Spencer Williams, CEO of Retirement Clearinghouse and the Portability Services Network. Williams states that the purpose is to "keep people's savings intact. From a benefits perspective, nothing could be more clear, and it doesn't cost an employer one red cent." Nesbitt's piece also quotes PSN member TIAA's statement expressing support for auto portability, which Nesbitt notes is core technology for the clearinghouse expansion plan "which automatically moves a worker's retirement savings from an old employer's plan into a new one."
Policy Experts See Trump Accounts as Future Hub for Rollovers
Writing in PSCA News, Paul Mulholland explores the potential implications of integrating Trump Accounts into our retirement system, "such as using them to assist in account consolidation and to increase uptake of the Saver’s Match." Mulholland turns to policy experts, including RCH's Neal Ringquist, who opines that "a lot would have to change legally for Trump accounts to be used" for consolidation purposes. As it pertains to the Saver's Match, Ringquist notes that "the $1,000 seed money contributions for Trump accounts can add interfacing experience between the Treasury Department and financial institutions which will be helpful in implementing the Saver’s Match."
Keeping the Missing Participant Search Compliant
PLANSPONSOR's Emily Boyle examines the current art & science of locating missing participants, concluding that plan sponsors must still take seriously their fiduciary responsibilities to address them. Boyle refers to RCH's "recommended three best practices for plan sponsors based on whether a participant is ahead, nearing or past a distribution event" and further cites industry expert Heather Bader, who believes that "automatic plan portability offered by the Portability Services Network LLC....will go a long way in helping solve the missing-participant issue." Boyle then turns to RCH EVP & Chief Revenue Officer Neal Ringquist, who offers key PSN metrics, adding that RCH has "released a white paper advocating that a neutral, shared, digital clearinghouse" based on the auto portability model, to form the basis for "a clearinghouse for the U.S. retirement system."
Auto-portability fix for small 401(k)s leaves Roth savers behind
InvestmentNews' Lee Almazora pivots off an earlier piece in CNBC that highlights a general gap in the transfer of retirement funds that blocks Roth funds from moving back into another employer-sponsored plan, affecting auto portability. Almazora paraphrases RCH EVP & Chief Revenue Officer Neal Ringquist, who lays out key auto portability statistics, including consolidations, plans adopted and the number of active participants served by the network.
Small 401(k)s may automatically follow workers to their next job — except Roth money
Writing for CBNC, personal finance reporter Sarah Agostino examines the plan-to-plan portability afforded by auto portability, as delivered by the Portability Services Network, and highlights a gap that does not permit Roth funds to move through the system. Agostino turns to RCH EVP Neal Ringquist, who provides an overview of some key auto portability metrics, including consolidations, plans adopted and the number of active participants currently served by the network. Regarding Roth balance limitations, Ringquist states: “we are hoping this restriction is addressed by legislation or regulators soon, as it would open up additional accounts that can take advantage of auto-portability, particularly those in state-based auto-IRA programs.”
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