QOTW: Auto-portability

Nearly 80 percent of plan sponsors surveyed have never heard of “auto portability” – a relatively new feature that would automatically move account balances from terminated employers to new employers, where possible. The feedback varies from “would like to know more” to “not our responsibility” – read more comments below.

Adopted it

• We transfer terminated employees to their new employer if possible.

Considered, have not adopted.

• Great idea but we are unlikely to be an early adopter.
• Have heard about it, don't really understand how it works.
   

Never heard of it

• Account management is an employee's responsibility not an employer's.  They are adults and should act accordingly.  What an employee decides to do with their investment and funds from an inactive plan is their business and not the employers nor should an employer be involved with this type of action. It seems to be a way for a current plan investment advisor/recordkeeper to get funds into their investment funds to boost their asset size and not really concerned about the employee.
• But, the current recordkeeper does not do automatic wires everything is issued check directly to participant and the participant sends to the new employer or their IRA firm.  They stopped all wires to personal bank accounts and other third parties entirely about 4 years ago.
• Doesn't sound like something in which we'd be interested
• Never heard of "auto-portability" and would need to talk with our TPA and broker to determine the viability and liability of such a feature being added to our plan.
• Our plans accept rollovers from previous employers and has auto distribution for accounts < $5k to an IRA.
• Participants have to complete a form to consolidate their balances in these cases.
• Sounds like a really good idea, not sure how this would work
• We have not considered it and even if we did, would probably not adopt it.
• Who manages and incurs cost of transfer? I assume this is for those accounts over $5000 - what value does that really bring to the employer?
• Would like to know more about this feature.