The move to expand auto portability for retirement plans took another step forward last week, when the Department of Labor proposed rules to implement a portion of the SECURE 2.0 Act, rules that would clarify the legality of fees associated with auto portability for defined contribution (DC) accounts.

The SECURE 2.0 Act made it easier for employers and employees to handle the movement of retirement funds as they move from one job to another. The Jan. 18 announcement said the new rules would allow automatic portability providers to receive fees for executing automatic portability transactions for certain IRA distributions.

Reducing losses in retirement savings due to changing jobs

This change is part of a broader move by the federal government to help working Americans keep track of their retirement savings as they move between jobs. It has been estimated that around $100 billion in retirement savings is lost every year when workers switch employers and cash out of their DC retirement plans. Workers can lose money through fees, taxes, or general "leakage" as the funds are either transferred or put to other uses.