LIMRA Consumer Research
About 10 million Defined Contribution (DC) participants change jobs each year – 3.4 million with account balances of less than $5,000.
More than half of these “low balance” participants cash out their DC plans when they change jobs.
Over the longer term, these participants – most of them younger – lose out on the potential for long-term growth of their retirement investment.
Cashing out is the “easy” behavior for these smaller balance accounts.
Automatic portability is a new approach to helping individuals retain retirement assets, in the Defined Contribution system, as they change jobs throughout their careers – and may be especially beneficial for younger workers.
LIMRA Secure Retirement Institute Assistant Vice President Matthew Drinkwater, Ph.D., FLMI, AFSI, PCS hosted Retirement Clearinghouse’s Spencer Williams and Tom Johnson at LIMRA’s 2016 Retirement Industry Conference to discuss the notion of Automatic Portability in DC plans, and advances on the regulatory and policy fronts.