Vanguard and Retirement Clearinghouse to Offer Auto Portability Service to 401(k) Participants

September 21, 2021

Service aims to help more Americans preserve and grow their retirement savings

VALLEY FORGE, Pa., Sept. 21, 2021 /PRNewswire/ -- Vanguard today announced plans to introduce an auto portability service for 401(k) sponsor clients and their participants. The firm has engaged Retirement Clearinghouse, LLC (RCH)—a leading provider of consolidation services for defined contribution plans and an RLJ Companies' majority owned company—to provide plan sponsors with a new portability solution to simplify small-balance 401(k) rollovers, help more employees preserve their retirement savings, and improve their chances of investment success. The service is expected to launch in mid-2022.



"As part of Vanguard's mission to serve all investors, we have a long legacy of challenging convention and pursuing innovative solutions that help improve outcomes for millions of retirement savers," said John James, managing director and head of Vanguard Institutional Investor Group. "Together with RCH, we aim to help the most vulnerable plan participants combine their retirement assets, capture the vast benefits of a 401(k) plan, and enhance their overall financial wellbeing."

"Our industry must safeguard against retirement plan leakage, which particularly affects Black and Brown workers and is contributing to a systemic issue of savings insufficiency in these underserved demographics," said Robert L. Johnson, founder and chairman of The RLJ Companies. "The combination of Vanguard's investor-centric mission and RCH's cutting-edge auto portability program is a promising and powerful force for change, one that I hope continues to drive mainstream adoption of this critical service."

Research shows 401(k) participants with smaller balances often do not roll over retirement savings into their new plans or tax-advantaged vehicles after changing jobs. Moreover, when a participant leaves a job with less than $5,000 in their 401(k), employers can transfer small balance accounts out of the plan and into a Safe Harbor IRA, where fees can be higher. In turn, this can result in a proliferation of stranded Safe Harbor IRAs, participant cash-outs, and forfeiture of future savings and returns. Additional information on plan leakage and auto portability is also available on RCH's website.

To reduce the number of participant cash-outs or abandoned savings, the RCH Auto Portability program automates the movement of an employee's 401(k) savings account from their former employer's plan into an active account with their current employer's plan. First piloted in 2017, the program completed the industry's first-ever fully automated, end-to-end transfer of retirement savings from a Safe Harbor IRA into an employee's active retirement account. The service can also help simplify plan administration and improve plan compliance by reducing the instances of abandoned accounts and uncashed checks.

"Our partnership with Vanguard represents a giant leap forward in the campaign to make auto portability for small accounts the new 401(k) plan default process when participants change jobs," said Spencer Williams, founder, president, and CEO of Retirement Clearinghouse, LLC. "By working with us to expand the nationwide, electronic network connecting employer-sponsored plans, Vanguard is helping simplify the 401(k) rollover process and giving more Americans the opportunity to strengthen their outcomes in retirement."

A leading recordkeeper for defined contribution plans, Vanguard has a long history of partnering with mission-aligned firms to provide groundbreaking solutions that help improve participant outcomes. Strategic engagements with industry-leading firms, such as RCH, enable Vanguard to augment its proprietary offerings and deliver comprehensive services, cutting-edge technologies, and best-in-class experiences to plan sponsors and their participants.

As a result of Vanguard's client-owned structure and mission to give every investor the best chance for success, the firm continues to take a stand for all retirement investors by advocating for industry practices and policy changes that help more Americans achieve retirement success. Vanguard is a primary supporter of key components of SECURE 2.0 legislation and has endorsed major retirement legislation and policy changes, including the Department of Labor's e-delivery rule, Securing a Strong Retirement Act, the Retirement Security and Savings Act, and the Receiving Electronic Statements to Improve Retiree Earnings (RETIRE) Act in 2018.

About Vanguard
Vanguard is one of the world's largest investment management companies. As of July 31, 2021, Vanguard managed $8.1 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers more than 418 funds to its more than 30 million investors worldwide. For more information, visit

About Retirement Clearinghouse
Retirement Clearinghouse, LLC is the leading provider of portability and consolidation services for defined contribution plans, acting as a trusted, unbiased intermediary between plan sponsors, participants, recordkeepers and other parties. Retirement Clearinghouse's integrated financial technology, data and information solutions facilitate automated consolidation of small, redundant accounts for sponsors to improve plan performance metrics, and enable participants, regardless of account balance, to seamlessly transport their retirement savings through every phase of their careers.

Retirement Clearinghouse's portability solutions have been proven to cut cash-outs by over 50% and significantly increase average account balances. The firm's portability solutions include a domestic call center providing specialized assistance designed to enable end-to-end portability and account consolidation; uncashed check services; and the capability to search for lost and missing participants.

Retirement Clearinghouse (RCH) remains the only independent provider that defines its primary business as the consolidation of retirement savings into active 401(k) or IRA accounts and provides plans and their participants with services that streamline the transfer of savings between retirement accounts.

Originally established as RolloverSystems in 2001, Charlotte, N.C.-based Retirement Clearinghouse works with more than 31,000 retirement plans and has helped guide over 1.6 million plan participants with more than $25 billion in retirement savings. Retirement Clearinghouse is a portfolio company of The RLJ Companies, founded by Robert L. Johnson. For more information, please visit

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For more information about Vanguard funds, visit or call 800-997-2798 to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.

Vanguard Marketing Corporation, Distributor.



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