For more than a year now, we have been working with the research team at the Employee Benefit Research Institute, Dr. Ricki Ingalls of Texas State University and Boston Research Technologies to develop the Auto Portability Simulation (APS). The APS is a robust, quantitatively-based simulation that measures the size, characteristics and behaviors of America’s increasingly mobile workforce. The key findings from that work demonstrate the potential to dramatically reduce retirement plan cash-outs by identifying the long-term, systemic benefits of routine and standardized account consolidation at the time of a participant’s job-change — a technology-based innovation called auto portability.
In the course of our work on the APS, one of the nation’s top record-keepers asked us to expand the scope of the simulation to include a broader view of the mobile workforce, in this case to model all accounts with less than $15,000 at the time of their holders’ job-changes. In doing so, we uncovered rather astounding data regarding the size and extent of what we refer to as “the small account challenge.”
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