Seeking to help more Americans preserve their retirement savings, Vanguard is partnering with Retirement Clearinghouse (RCH) to introduce an auto portability service for 401(k) sponsor clients and their participants.
RCH, which is a RLJ majority-owned company, provides consolidation services for DC plans to provide plan sponsors with a portability solution to simplify small-balance 401(k) rollovers. To reduce the number of participant cash-outs or abandoned savings, the RCH Auto Portability program automates the movement of an employee’s 401(k) savings account from their former employer’s plan into an active account with their current employer’s plan. The service also helps to simplify plan administration and improve plan compliance by reducing the instances of abandoned accounts and uncashed checks.
“Together with RCH, we aim to help the most vulnerable plan participants combine their retirement assets, capture the vast benefits of a 401(k) plan, and enhance their overall financial wellbeing,” stated John James, managing director and head of Vanguard Institutional Investor Group.
“Our partnership with Vanguard represents a giant leap forward in the campaign to make auto portability for small accounts the new 401(k) plan default process when participants change jobs,” added Spencer Williams, founder, president and CEO of Retirement Clearinghouse. “By working with us to expand the nationwide, electronic network connecting employer-sponsored plans, Vanguard is helping simplify the 401(k) rollover process and giving more Americans the opportunity to strengthen their outcomes in retirement.”
According to the Sept. 21 announcement, the service is expected to launch in mid-2022.
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