The Portability Services Network seeks to make it easier for participants to transfer retirement assets when they change plans.
Backers of the new bill say the legislation would cut red tape and help Americans who change jobs frequently keep control of their retirement savings and investments.
Research shows workers who cash out their retirement plan savings could lose roughly 1.5 years of accumulated wages, but auto-portability seeks to make it easier to prevent this.
Retirement industry experts say automatic portability could be the solution to a pervasive problem.
Considering automatically rolling balances from one plan to another for participants who terminate employment with small balances plan sponsors are allowed to cashout, EBRI found additional accumulations over 40 years would be $1.5 trillion.
Now that participants’ small balances may be automatically transferred to their new 401(k) account, Retirement Clearinghouse expects to see a lot of business.