Ask an Adviser: How can I best help plan participants who are about to retire?

Welcome to Ask an Adviser, EBN’s new weekly column in which benefit brokers and advisers answer (anonymous) queries sent in by our readers. Looking for some expert advice? Please submit questions to askanadviser@arizent.com.

This week, we asked Spencer Williams, president and CEO of Retirement Clearinghouse, to weigh in on the following: How can I help plan participants who are nearing retirement prepare for their spend down by gathering all their qualified savings in one place?

It’s an excellent question that doesn’t always get a lot of attention. Keep in mind that the average 60-year-old baby boomer who’s nearing retirement will have switched employers almost 10 times in his or her career, according to data from the Employee Benefit Research Institute (EBRI). So it’s not unusual for many boomer participants to be managing their current 401(k) alongside an IRA, or perhaps several 401(k) accounts they left behind in prior employers’ plans. But plan sponsors can play a major role in simplifying the path to decumulation for these boomers.

Read more: Employees may be losing out on $700K in ‘forgotten’ 401(k)s

As part of their financial wellness programs, the members of a plan sponsor’s benefits department can hold virtual or in-person meetings with current employees and comb through their individual job histories. During these consultations, benefits pros can ask plan participants, while reviewing every past job, “Were you enrolled in the 401(k) plan there? What happened to your account when you left? Who was the plan recordkeeper?”

After reviewing this information from a participant, the plan sponsor can refer them to the recordkeeper’s call center — if the recordkeeper offers such a service in an unbiased way. Alternatively, the plan sponsor can refer a reliable, inexpensive roll-in service provider that can locate and consolidate IRA and 401(k) accounts from prior-employer plans, and then facilitate the process of rolling them all into the participant’s active account in the sponsor’s plan, provided the plan allows roll-in contributions from other 401(k) plans or IRAs.

Read more: To make 401(k)s more accessible, this company is helping make them portable

An external service will generally operate on a fee-for-service basis for all participants, regardless of account balance. If plan sponsors pay these fees and the service is available to all participants, then they can be considered permissible plan expenses.

Participants of all ages — not just baby boomers — will be grateful for assistance with account consolidation. A 2015 study about mobile workforce behaviors, conducted by Boston Research Technologies and Retirement Clearinghouse, found that 93% of surveyed participants considered roll-in assistance to be a “good” or “valuable” benefit.