Staff
The bi-partisan Congress today supported the longtime efforts of Robert L. Johnson, founder of The RLJ Companies and Chairman of Portability Services Network (PSN) and Retirement Clearinghouse (RCH), by passing legislation that codifies auto portability. Auto Portability is the routine, standardized, and automated movement of an employee’s retirement saving account balance (under $5000) from the retirement plan of their former employer into an active account in their current employer’s plan. Retirement Clearinghouse developed the technology and created the intellectual property to power auto portability, which makes it easy for American workers to move and consolidate their 401(k) account at the point they change jobs.
“I am pleased that this Congress codified auto portability and thereby recognized the value and importance this plan feature delivers to address the retirement security needs of so many underserved Americans,” said Johnson. “I am particularly grateful to Senators Tim Scott (R-SC) and Sherrod Brown (D-OH) for their support in advancing auto portability through this Congress. I also want to thank Marc Morial, President & CEO of the National Urban League and Derrick Johnson, President & CEO of the NAACP for their leadership and being early, vocal supporters of auto portability. As the leading National organizations respectively focused on equality and economic empowerment, they noted that auto portability addresses the retirement savings crisis confronting Black Americans and low-wage workers, ensures a financial infrastructure necessary to maintain economic stability for retirement savings, and addresses the racial wealth gap,” Johnson concluded.
Approximately $92 billion in savings leaves the U.S. retirement system every year because Americans who change jobs prematurely cash out their workplace retirement accounts and pay taxes and penalties on those cash-outs.
The Employee Benefit Research Institute (EBRI) estimates that if auto Portability was broadly adopted, over the course of a 40-year period, an additional $1.5 trillion in savings would be preserved in the U.S. retirement system, including $619 billion for 67 million B