Automatic Rollover Program

Participants don’t always take their retirement savings with them when they leave their employers. This is particularly true of participants with smaller balances. And with younger professionals changing jobs more frequently and American workers overall now holding several jobs over the course of their career, the volume of abandoned accounts isn’t likely to go away any time soon.

Left unaddressed, abandoned accounts drive up plan costs and create administrative burdens and diverts attention away from active employees. Designed to address the servicing needs of TPAs, recordkeepers, advisory firms, and plan sponsors, our Automatic Rollover Program (ARP) greatly simplifies the administration of mandatory rollovers at the plan level by helping:

Reduce plan expenses - Mandatory distributions help reduce plan expenses where recordkeepers charge fees on the number of accounts or the average account balance.

Eliminate the cost of an audit - Distributing small balance accounts may reduce the participant count to under 100 – eliminating the expense of auditing the plan.

Reduce participant disclosures - Under ERISA Regulation Section 2550.404a-5 the plan must still mail annual and quarterly disclosures to terminated participants. Force-out distributions reduce the number of participants to whom disclosures need to be provided.

Keep track of former employees - Mandatory distributions eliminate the need to keep track of former employees and also reduce the need for missing participant searches.

Reduce fiduciary responsibility - Exposure may be minimal, but plan sponsors are required to act prudently and in the best interests of terminated participants. Mandatory distributions can reduce fiduciary responsibility for former employees, and the fiduciaries benefit from the safe harbor that protects them.