The Portability Services Network is live, as of Wednesday, enabling digital automatic portability of retirement accounts from the country’s six largest recordkeepers.

Three of the six—Alight Solutions, Vanguard and Fidelity—have all completed implementation and are in the process of onboarding plan sponsors to automatically port 401(k) plan balances between member recordkeeping platforms when participants change jobs. The other three recordkeepers with ownership interest in Portability Services Network LLC—Empower, Principal and TIAA—are slated to go live with their plan sponsors by year end 2024. Once all six are set up, the network will cover about 63% of workplace retirement plans, according to PSN.

The launch comes about 12 months after the program was announced in 2022, developing from a project started by Retirement Clearinghouse LLC to capture lost or terminated accounts and prevent 401(k) plan leakage.

The network is designed to enable American workers to automatically move 401(k), 401(a), 403(b) and 457 account balances less than $7,000 from plan to plan at the point when they change jobs. The automation of these transfers is designed to prevent retirement plan leakage and premature cash-outs by participants. The savings will be particularly beneficial to communities of color, women and low-income workers, according to PSN.

“The Portability Services Network is poised to deliver on its core mission to stem the cash-out crisis that harms Black and other under-served and under-saved low-wage workers,” said Robert L. Johnson, chairman of PSN and Retirement Clearinghouse, in a statement. “PSN, through its innovative business model, will serve more than 60% of all workers seeking to maintain their 401(k) accounts in the retirement system throughout their working lives.”

Fidelity, the country’s largest recordkeeper, was among the initial group to join the network as co-owners in October 2022.

“We are excited to be a founding partner in a solution that can help under-saved and under-served workers improve their long-term retirement prospects,” Dave Gray, head of workplace retirement offerings and platforms at Fidelity, said in an emailed statement. “Too often, individuals with small account balances change jobs and ultimately lose the hard-earned money they had set aside for their future. By offering people the ability to move this money more easily as job change occurs, we are helping improve the financial wellness of millions of Americans and also contributing to a stronger retirement system and overall economy.”

PSN hopes to bring on more recordkeepers by the end of 2024 to reach coverage of 80% of the marketplace, Neal Ringquist, Retirement Clearinghouse’s executive vice president and chief revenue officer, told PLANADVISER in September.

For PSN member recordkeepers and the plans that have elected the auto portability solution, PSN acts as a clearinghouse for automatically locating a participant’s active retirement account in their current employer’s plan and transferring the balance from a previous employer into their current plan.