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Will Roll-ins Take Off?

While most DC plans with more than $5 million allow roll-ins, relatively few participants take advantage of the opportunity to consolidate their DC and IRA accounts as part of the process.

According to research by Boston Research Group, 96% of plans with more than $5 million allow roll-ins but just 5% of participants rolled in old accounts, with 45% of plans “actively encouraging” the activity. But all that could change, especially if the DOL’s conflict-of-interest rule takes effect.

Pensions & Investments reported recently on a number of companies, including International Paper, Intuit and HSA — as well as the federal government’s Thrift Savings Plan (TSP) — that, working in concert with their record keepers, have made it easier for employees to consolidate accounts. These larger plans offer competitive pricing and diversified investments, making it attractive for participants as well as easier to manage than multiple and disparate accounts. Along with helping employees, plan sponsors get greater leverage and pricing — not just as assets grow but also as account balances get bigger.

If the DOL’s proposed rule becomes law, some people might have less access to advice. That, in turn, might provide an incentive to consolidate accounts where they could have access to experienced advisors.