Portable 401(k) Plans Stumble on Incentives for Industry Buy-In

Federal policymakers promoting 401(k) plan portability options face an uphill battle obtaining universal Wall Street buy-in, threatening to hamper the success of a plan to let small-balance accounts automatically follow workers who switch jobs.

The US Labor Department is working on a rulemaking project mandated by Congress through the SECURE 2.0 Act to cut administrative red tape and let 401(k) balances move even when a worker hasn’t directly consented.

It’s part of a wholesale effort in Washington to reduce leakage from employer-sponsored plans in the US and avoid workers losing track of their savings.

But plan sponsors wouldn’t be ...