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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.