How Does Auto Portability Work? Watch the Video.
Auto portability incorporates four basic operating elements, as shown in the figure below and described in the text that follows.
Auto portability incorporates four basic operating elements:
1. Notices: Upon becoming subject to a Mandatory Distribution, legally required information notices are provided to participants in the auto portability program.
2. Electronic Records Matching:
- Account information is extracted, formatted and passed to the Portability Services Network (PSN).
- The PSN collects, standardizes and re-distributes account information to all record-keepers that participate in the auto portability program.
- Participating record-keepers utilize the Locate technology to query their plan/participant records to identify potential matches of accounts.
- Upon attaining a successful Match, account information is further validated and a notice is sent requesting that the participant consent to the transaction.
3. Consent: All required consent notices are sent to participants once a match is confirmed, as per the DOL guidance. Participant consent to the roll-in transaction can be obtained utilizing a variety of methods including:
- Affirmative written consent obtained at the time of enrollment in their new-employer plan.
- Affirmative consent given by accessing a secure website or voice response system.
- Affirmative consent given by contacting a call center.
- Non-responder roll-in transactions.
4. Automated Roll-In (Money Movement):
- The inactive account is closed, and the balance is rolled into the participant’s new-employer plan.
- The balance is automatically invested according to the participant’s current investment elections, or if the participant has not made an election, into the retirement plan’s default investment option.
- The participant is notified when the account is moved and consolidated into the new-employer plan.
How Does Auto Portability Work? Watch the Video.
