The Department of Labor has issued a final prohibited transaction exemption for Retirement Clearinghouse’s auto-portability program, a move which may decrease the likelihood employees cash out their retirement plans when they switch jobs.
DOL posted the exemption on Wednesday in response to a request for relief from the clearinghouse, a financial technology services company that works with plan sponsors and service providers. Auto-portability — or the automated movement of employee’s money from a former employer’s retirement plan to their account at a new company — has been touted as a way to minimize the leakage of retirement savings, experts say.
