Fidelity, Vanguard team up to ease 401(k) portability when workers switch jobs

A new partnership between 401(k) administrators could preserve more than $1 trillion in retirement savings, helping tens of millions of workers in the U.S. keep more money in their 401(k) plans.

The three 401(k) administrators are Fidelity Investments, Vanguard, and Alight Solutions, which represent approximately 43.8 million workers across more than 48,000 employer-sponsored retirement plans, the three groups said in a statement. The new consortium will utilize Retirement Clearinghouse (RC),a service that provides account portability for retirement plans when workers change jobs.

“With this historic development, American workers who change employers can have their workplace retirement savings automatically move to their new retirement plans. Automating the process of moving 401(k), 401(a), 403(b), and 457 account balances from plan to plan when workers change jobs will help mitigate cash-out leakage and preserve trillions of dollars in savings in the U.S. retirement system, particularly benefiting minorities, women, and low-income workers,” the statement said.