Benefits to Plans & Participants
Auto portability, accessed via PSN and your plan's member recordkeeper, can deliver significant benefits to your participants as well as to your plan.
1. Plan-Level Benefits of Auto Portability
The benefits of auto portability accrue to plan sponsors in the form of lower plan administration expense and burdens for plan sponsors, a benefit achieved through both a reduction in the number of small, inactive accounts and the increase in active account balances as auto portability transfers new employees’ savings into their current employer plan. Expense reductions are also realized as the incidence of lost and missing accounts is reduced, as well as the incidence of uncashed checks.
Administrative cost and burdens are a particularly acute issue for companies that exhibit high rates of employee turnover, such as those in the retail, hospital services, transportation, hospitality, and food & beverage industries, which collectively employ tens of millions of workers.
A secondary benefit to plan sponsors is the increase in financial wellness experienced by their employees as they preserve their savings and accumulate larger account balances over time.
2. Four Dimensions of Value for Your Plan's Participants
Participants in plans with auto portability will find portability easier, preserve their retirement savings more often, and reduce overall fees while improving long-term investment returns.