Retirement plan portability a key issue, DOL roundtable speakers say

The need to make workplace retirement plans portable and more accessible emerged as one of the top themes in a spirited roundtable discussion the Department of Labor hosted Monday in New York with legislators, labor leaders, investment fund managers, educators and other industry stakeholders.

"Every single American worker should be able to retire with security," Labor Secretary Marty Walsh said. "No one should have to worry about outliving their money and living in poverty for the rest of their life."

The roundtable was the first in a series of discussions that the Mr. Walsh and his representative for pensions and retirement, Kathleen Kennedy Townsend, plan to host throughout the country on how to build better retirement security for the nation's workers.

Many of the speakers lamented the shift in the private sector to defined contribution plans, saying that only 16% of private-sector workers today have pension plans. In the public sector, the percentage of workers having a pension plan is still high at 86%.

Others spoke about the issue of private-sector workers not having access to a workplace retirement plan, a problem being addressed by the state-run savings programs springing up across the country.

"We should learn from the success of the state-centered savings plans," said New York State Comptroller Thomas P. DiNapoli, noting New York's recent launch of its own Secure Choice Savings Program. Mr. DiNapoli is the sole trustee of the $279.7 billion New York Common Retirement Fund, Albany.

Debra Whitman, executive vice president and chief public policy officer at AARP, echoed other speakers in saying that retirement security — and efforts to increase access to private-sector workplace retirement plans — is a bipartisan issue with broad support. "It's not a red or a blue state issue," Ms. Whitman said. "It's popular all over."

Andrew D. Eschtruth, associate director for external relations at Boston College Center for Retirement Research, drew attention to the issue of retirement plan portability, which he said is a big problem for people with small accounts who move from job to job.

Workers switching jobs should be able to easily move their 401(k) funds to their new employer's plan, but "it's one of the hardest things to do" because "the system is really not designed to make this a priority," Mr. Eschtruth said.

Plan sponsors, for example, are not required to accept a rollover from an old 401(k), Mr. Eschtruth said.

Ms. Whitman urged Mr. Walsh to prioritize portability issues. "These are regulatory issues that you and your team at the Employee Benefits Security Administration can handle right away," she said.

"You can make some regulatory requirements of employers so that the handoff is seamless for individuals," Ms. Whitman said.