Copyright Vasyl/Adobe Stock
More than 15,000 retirement plans, representing approximately 5 million participants, have signed up for auto portability, announced the Portability Services Network (PSN), in its first year of operation.
Auto portability is the automated, routine, and standardized movement of a participant's retirement savings account (with less than $7,000) from their prior employer's plan into an active account in the plan sponsored by their current employer.
Recommended For You
“Auto portability was conceived as an innovation to benefit minority and women savers, and it is immensely gratifying to witness its coming to fruition …,” said Robert L. Johnson, Chairman of the Portability Services Network and Retirement Clearinghouse (RCH).
Auto portability was designed to help plan sponsors, recordkeepers, and participants work together to plug that $92 billion in cash-out leakage, so that small balances don't keep leaking out of the system, or stay stuck in defined contribution plans, according to Spencer Williams, CEO, Portability Service Network and Retirement Clearinghouse.
Six asset managers – Alight, Vanguard, Fidelity Investments, Empower, TIAA, and Principal -- made “auto portability a reality,” said Johnson. “We encourage more plan sponsors and recordkeepers to join and do their part to assist low-income workers in achieving a financially secure retirement.”
Auto portability of 401(k) retirement accounts was given a push by SECURE 2.0, which enabled more auto-portability, according to the PSN and the RCH. The two organizations are part of a public-private partnership to oversee the auto-portability system. The partnership has been working on data sharing and fund transfer capabilities, along with the six asset managers.
Systemic frictions in the U.S. retirement system have historically impeded efforts to preserve, consolidate, and incubate 401(k) savings at the point of job-change. These frictions have disproportionately affected minority Americans, who have found it much easier to prematurely cash out their savings than keep those precious dollars invested in the retirement system.
Related: After 50 years of milestones the retirement industry is bracking for yet more innovations
Research from RCH estimates that $1.6 trillion in additional savings would be preserved in the U.S. retirement system over a 40-year period if auto portability were to be adopted by plan sponsors and recordkeepers across the nation. That sum would include $744 billion in extra retirement income for 98 million minority job-changers, with 30 million Black Americans expected to preserve $216 billion in incremental retirement wealth.
"The number of defined contribution plans that have enrolled in auto portability in just one year represents an incredible response," said Williams. "In fact, recent survey results indicate that the response from plan sponsors has been more overwhelmingly positive than anything we've seen in the past regarding a new initiative from the retirement services industry."
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Lynn Cavanaugh
Lynn Varacalli Cavanaugh is Senior Editor, Retirement at BenefitsPRO. Prior, she was editor-in-chief of the What's New in Benefits & Compensation newsletter. She has worked for major firms in the employee benefits space, Vanguard and Willis Towers Watson, as well as top media companies, including Condé Nast and American Media.
