Portability Services Network Launches Nation’s First Solution to Move Workers' Retirement Savings When Changing Jobs
Retirement Clearinghouse, Leading Workplace Retirement Plan Providers, and Employers Across the Country Collaborate to Increase Savings for Lower-Wage Workers Through Auto Portability
Portability Services Network Chairman Robert L. Johnson Encourages Employers to Join
CHARLOTTE, NC—November 7, 2023—The Portability Services Network (PSN) announced the launch of its digital auto portability solution, designed to help tens of millions of under-served and under-saved Americans keep their retirement savings invested and working for them when they change jobs. Having become operational 12 months after being announced in 2022, PSN includes as founding members the nation’s leading workplace retirement plan recordkeepers—Alight Solutions, Empower, Fidelity Investments, Principal, TIAA, and Vanguard—under the leadership of Robert L. Johnson, Chairman of the PSN and Retirement Clearinghouse, LLC.
“The Portability Services Network is poised to deliver on its core mission to stem the cash-out crisis that harms Black and other under-served and under-saved low-wage workers,” said Robert L. Johnson, Chairman of PSN and Retirement Clearinghouse, LLC. “PSN, through its innovative business model, will serve more than 60% of all workers seeking to maintain their 401(k) accounts in the retirement system throughout their working lives.”
Mr. Johnson continued, “Working with the nation’s employers, PSN’s network of plan providers has the potential of helping American workers retain more than $1.5 trillion in retirement savings that is currently leaking out of the system when they change jobs, including $619 billion in retirement savings for low-wage Black and other minority workers over the coming generation. So far, we have seen great interest from employers—and we encourage all plan sponsors to learn about how this solution can help their employees greatly improve their retirement security.”
To learn more, view a video here of leaders of Portability Services Network sharing their commitment to help improve American workers retirement savings situations and outcomes.
PSN is the culmination of more than a decade of collaboration between the private and public sectors to enable American workers to automatically move 401(k), 401(a), 403(b), and 457 account balances under $7,000 from plan to plan at the point when they change jobs. The automation of this process will help reduce the leakage of assets from the U.S. retirement system stemming from premature cash-outs of accounts and preserve trillions of dollars in savings, which is particularly beneficial for communities of color, women, and low-income workers.
About Retirement Clearinghouse
Retirement Clearinghouse, LLC is the leading provider of portability and consolidation services for defined contribution plans, acting as a trusted, unbiased intermediary between plan sponsors, participants, recordkeepers and other parties. Retirement Clearinghouse’s integrated financial technology, data and information solutions facilitate automated consolidation of small, redundant accounts for sponsors to improve plan performance, and enable participants, regardless of account balance, to seamlessly transport their retirement savings through every phase of their careers. These solutions include a domestic call center providing specialized assistance designed to enable end-to-end portability and account consolidation; uncashed check services; and the capability to search for lost and missing participants.
Retirement Clearinghouse works with more than 37,000 retirement plans and has helped guide over 2 million plan participants with more than $30 billion in retirement savings. Retirement Clearinghouse is a portfolio company of The RLJ Companies, founded by Robert L. Johnson. For more information, please visit www.rch1.com.
About Portability Services Network
Portability Services Network, LLC (PSN) is an independent, industry-led utility which utilizes the Retirement Clearinghouse (RCH) technology to build a nationwide, digital hub connecting workplace retirement plan recordkeepers and the plan sponsors they serve that elect the auto portability service.
For PSN member recordkeepers and the plans that have elected the auto portability solution, PSN acts as a clearinghouse for automatically locating a participant’s active 401(k), 401(a), 403(b) or 457 account in their current employer’s plan and transferring the same participant’s account under $7,000 as of December 31, 2023, from their prior employer’s plan into their active account.
PSN’s Board Members—Alight, Vanguard, Fidelity, Empower, TIAA, and Principal—encourage other recordkeepers to join the PSN, as growth of the network will only help to strengthen its ability to minimize cash-out leakage and improve retirement outcomes for America’s under-served and under-saved workers by creating even more opportunities to match participants with the workplace retirement accounts at their previous employers. Recordkeepers that own or participate in PSN will not receive any compensation for facilitating auto portability transactions from participants. For more information, please visit https://psn1.com/.
JConnelly for Portability Services Network and Retirement Clearinghouse