Over a year since its initial announcement, the Portability Services Network (PSN) has now launched its digital auto portability solution, aimed at simplifying the process of retirement plan rollovers for employees changing employers with cutting down on plan leakage.
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.
Founding members of PSN include six of the largest retirement plan recordkeepers, including Alight Solutions, Empower, Fidelity Investments, Principal, TIAA, and Vanguard, who will all be under the leadership of Robert L. Johnson, chairman of the PSN and Retirement Clearinghouse, LLC.
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 from their prior employer’s plan into their active account.
Along with cutting plan leakage, the network is particularly driven to help underserved communities, who in the past have disproportionately lacked access to holistic advice, financial education, and plan tools that would help avoid cash outs and further leakage.
“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 Johnson in a statement announcing the launch. “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.”
Johnson estimates that through PSN’s efforts, workers could potentially retain more than $1.5 trillion in retirement savings, including $619 billion in retirement savings for low-wage Black workers and minority communities over the next 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,” Johnson adds.
SEE ALSO:
- Focus Shifts to Plan Sponsors as Portability Network Set to Go Live
- The Big Shift Towards Auto Portability
- Auto Portability’s Big Move: Major Recordkeepers Form Consortium with RCH
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
