Bloomberg Law
Oct. 5, 2022, 5:30 PM

Fidelity, Vanguard Team to Help Job-Switchers Transfer 401(k)s

Suzanne Woolley
Suzanne Woolley
Bloomberg News

Fidelity Investments and Vanguard announced a rare collaborative effort Wednesday to help employees keep their retirement savings in tax-advantaged accounts like 401(k)s when they switch jobs.

The two retirement giants, along with benefits administrator Alight Solutions, created a jointly owned consortium to automate the transfer of millions of 401(k) balances below $5,000 when workers change employers. An estimated $92 billion is taken out of retirement savings each year due to cash-outs, according to the Employee Benefit Research Institute (EBRI).

Auto-portability of workplace retirement plans is an idea that’s been talked about for years but requires scale to make much of a difference. EBRI estimates that if auto-portability ...