PLANSPONSOR - September - October 2023 - 11

departing employees' balances above
$1,000 and cash out those under $1,000. If
the sponsor wants to include an auto-portability
feature to eliminate issuing multiple
small checks, and the uncashed check
problem, it will be able to accept negative
consent roll-ins only below $1,000.
Every roll-in comes through an RCH
individual
retirement
account-either
a safe harbor IRA or a conduit IRA-
Ringquist says. While over 95% of plans
allow roll-ins from other plans, only about
a known bad address or opt-out elections;
and to initiate and confirm rollovers into
a new plan, says Steve Holman, principal
in Vanguard's institutional investor group
client and distribution enablement group.
The process starts when a participant
qualifies to be forced out of his previous
plan. At that time, the plan's recordkeeper
automatically sends the person's Social
Security number and account number
to PSN. PSN drops the account number
and replaces it with a randomly generated
Plans that do not currently allow IRA
roll-ins and want auto-portability
will need to modify their plan
document to accept them.
two-thirds allow roll-ins from IRAs, he
notes, citing Plan Sponsor Council of
America data. Plans that do not currently
allow IRA roll-ins and want auto-portability
will need to modify their plan document
to accept them. Plans sponsors will
not need any technology build-outs to
adopt auto-portability, but they will have
to add a data-sharing provision to the
contract with their recordkeeper.
Moving Data
RCH further describes auto-portability
as " an electronic records matching technology
that is used to locate and match
participant accounts across recordkeeping
platforms. " A set of 14 application
programming interfaces is an essential
part of the locate-and-match technology.
These APIs allow recordkeepers and PSN
to automatically exchange the data needed
to search for participants' prior and
current retirement accounts, assuming
both plans are with a PSN recordkeeper.
The APIs are also used to establish
new companies and plans on the network;
to share eligible accounts; to locate and
match active accounts;
to
request and
share account details when a participant is
found as active in a new plan; to inform of
number in a new dataset, Ringquist says.
PSN then uses its " locate API " and sends
that dataset to its member recordkeepers,
which query their databases of plans
signed up, seeking the participant's Social
Security number at a new plan.
When an individual is located, the
recordkeeper uses the PSN " match API "
and sends PSN a dataset
in which the
company drops the participant's Social
Security number and adds certain demographic
data to the previously generated
random number. PSN goes back to the
sending recordkeeper and asks for the
same dataset. PSN runs the two datasets
TIDBITS
A Plan for Permanence
Americans are increasingly
likely to say they will stay
with their current employer if it
offers an employer-sponsored
retirement savings plan.
Source: Voya Financial, " Voya Consumer
Omnibus Research: Retirement Report Q2 2023 "
June 2023
October 2022
71% 60%
through a match algorithm to verify the
individual's identity; the entire process
is completed by API calls. " To the extent
that that account detail is matched above
a particular score, that starts the consent
process, and PSN sends consent notifications
to the individual as we're operating
right now under Department of Labor
guidance, " Ringquist says.
Implementation Timeline
Owner member
recordkeepers
that
recently joined PSN have individual time
frames for introducing auto-portability
to their clients. Ringquist says the implementation
consists of three steps. First, the
recordkeeper defines its business requirements
for auto-portability. The second step
consists of building the APIs, and the final
step is to test the process. Testing is extensive
because queries can involve millions
of records being queried across the recordkeeper's
book
of
business, Ringquist
stresses. " I'd say this is a six-month effort
when you look at those three phases, to
get something like this completed from a
recordkeeper's perspective. "
So far, sponsors' initial reactions have
been universally positive, he says. " They
see the value to the participants, and they
see the ease of joining the network. [But]
we've only been able to share with them
in concept, so they want to see the legal
contract they're signing to join. We'll be
ready to share that information with the
plan sponsors shortly. " -Ed McCarthy
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