Auto-portability of Retirement Plan Benefits
According to estimates, about 22% of participants in 401(k)s and other defined contribution plans change jobs each year and of these, 31% cash out all of their retirement savings. The Department of Labor issued an exemption designed to prevent this drain on retirement savings. The exemption allows Retirement Clearinghouse, a financial technology services firm, to receive fees for the automatic transfer of inactive retirement benefits to the plan of a new employer. Auto-portability is a voluntary benefit; participation is not mandatory.