By Steve Holman | July 14, 2026

Auto portability has moved from concept to reality, becoming one of the retirement industry's fastest-growing innovations for helping workers preserve and consolidate their retirement savings when they change jobs. As adoption continues to expand among leading defined contribution recordkeepers and plan sponsors, auto portability is increasingly viewed not as an emerging option, but as a practical solution to one of the long-standing challenges facing the retirement system: cashout leakage and fragmented savings.

Yet despite its growing momentum and demonstrated results, misconceptions about auto portability continue to circulate. Some are rooted in outdated assumptions from the industry's early discussions, while others simply fail to reflect the significant progress auto portability has made in recent years.

Let's separate fact from fiction by addressing five of the most common myths about auto portability.

MYTH #1: Only a handful of recordkeepers have adopted auto portability.

REALITY: The “handful” of Portability Services Network (PSN) defined contribution recordkeepers represent:

  • 6 of the top 10 defined contribution recordkeepers (participants)
  • 63% of all defined contribution participants
  • 82 million workers across more than 185,000 employer-sponsored retirement plans

That’s quite an extraordinary handful! And if historic industry patterns of growth, consolidation and concentration continue, then these figures should increase – even with no new members. But we absolutely do expect more recordkeepers to join PSN, as they finalize their implementation of mandatory provisions of SECURE 2.0 and turn to auto portability, which is a voluntary plan provision.

MYTH #2: Plan sponsor adoption is slow.

REALITY: Plan sponsor adoption has exceeded our expectations, in terms of the pace of adoption, as well as the number of participants that adopting plans represent:

Market adoption of any new innovation typically follows a predictable path, and auto portability is no exception.We believe that auto portability’s adoption is in the “early majority” adoption phase.

MYTH #3: Auto portability’s technology and operations aren’t proven and are “risky” for plan sponsors.

REALITY: Untrue – auto portability has been operating for two years, and the underlying technology and operations have performed extremely well, automatically consolidating over 42,000 plan-to-plan balance transfers, while performing hundreds of thousands of locate queries over the network.

Importantly, auto portability has successfully navigated several important “burn in” scenarios, where the largest recordkeepers have quickly onboarded large volumes of plans and participants. These scenarios have required that auto portability’s components and systems operate continuously under stressful conditions, and the technology and operations infrastructure has emerged with flying colors.

While the decision to adopt auto portability involves fiduciary responsibilities, it has built-in participant protections, guardrails, cybersecurity safeguards and transparent pricing. Because auto portability represents an enhanced standard of care for job-changing participants who are subject to their plan’s mandatory distribution features, we firmly believe that the decision to adopt auto portability lessens, rather than increases fiduciary risk.

MYTH #4: Balances under $1,000 aren’t included.

REALITY: The original framework for auto portability, as identified in Prohibited Transaction Exemption 2019-02, clearly allowed for the inclusion of balances below $1,000.In their Proposed Rule on auto portability, the DOL only identified balances between $1,000 and $7,000. In a comment letter to the DOL’s Proposed Rule, PSN states: “PTE 2019-02 currently covers transfers of accounts with a value of $1,000 or less, and many plans currently participate in PSN’s auto-portability program based on the understanding that the accounts will be covered.” Later this year, we expect regulatory clarity on this issue to dispense with any further doubt.

MYTH #5: There’s no benefit to plan advisors.

REALITY: If only I had a nickel for each time I’ve heard this myth. There is a persistent misconception among plan advisors that auto portability either delivers no benefit, or worse – poses a threat to their plan advisory business.

The opposite is true. Auto portability strengthens advisors’ value by increasing the inflow of plan assets through automated roll in contributions that would otherwise be cashed out, thereby expanding opportunities for wealth management. Increased, ongoing asset inflows for new participants result in increased average balances which, in turn, tend to reduce cashout leakage. This creates stronger plans that form a more attractive foundation for future advisory services.

Putting Things into Perspective
The continued need to debunk myths about auto portability is actually a sign of how far the solution has come. Not long ago, many industry observers questioned whether auto portability could be implemented at scale, gain broad recordkeeper support, or earn the confidence of plan sponsors. Today, the conversation has shifted from whether auto portability can work to how quickly adoption will continue to grow.

The facts are increasingly difficult to ignore – leading recordkeepers have joined the network, millions of participants are now represented by adopting plans, tens of thousands of accounts have already been automatically consolidated, and the technology has proven itself under real-world operating conditions.

As the retirement industry continues its focus on improving participant outcomes and reducing unnecessary leakage from the system, auto portability is demonstrating its value as a practical, scalable solution. That is why the future of auto portability is no longer defined by skepticism – it is being defined by adoption, results, and growing industry confidence.

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