Retirement Clearinghouse (RCH) has made available the results from a new version of their Auto Portability Simulation (APS), a discrete event simulation that models the adoption of auto portability within America’s defined contribution system, over a 40-year period.
The new APS analysis has improved the model’s predictive accuracy by incorporating updated parameters that reflect “changing realities” driven by three major developments: 1) the advent of the Portability Services Network, 2) the passage of the SECURE 2.0 Act and 3) ongoing progress in expanding access to workplace retirement savings plans.
Key findings of the study:
- Significantly more small-balance job-changers will be subject to new mandatory distribution provisions
- Auto portability exerts a dramatic effect on reducing cashout leakage.
- Auto portability will grow net incremental wealth by $1.6 Trillion, vs. no auto portability.
- Minorities will derive more benefit from auto portability as expanded access becomes the “Great Equalizer” in bringing minority DC participation in-line with demographic projections of America’s population.
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