Sewickley, Pa. – July 19, 2016. Retirement Clearinghouse, LLC used Simio simulation software to reveal that widespread adoption of plan-to-plan transfers for small-balance accounts could generate more than $115 billion in new employer-plan savings for the current and next generation of plan participants.
The simulation is the first time discrete event simulation has been used to model the effects of America’s mobile workforce in the retirement industry. Retirement Clearinghouse used Simio to model the effect of leakage – when employees cash out retirement accounts upon switching jobs – for those retirement accounts containing less than $5,000. J. Spencer Williams, founder, president and CEO of Retirement Clearinghouse, presented the simulation results at recent Employee Benefits Research Institute Policy Forum with Ricki Ingalls, a consultant with Diamond Head Associates.
Simulation valuable for financial industry
C. Dennis Pegden, Ph.D., Simio Chief Executive Officer and Founder, notes that the results of Retirement Clearinghouse’s simulation point to ways that the financial industry could benefit from discrete event simulation. “Industries that need to track multiple processes will likely find that Simio discrete-event simulation can better model their reality than even the most sophisticated spreadsheet, and provide more detailed information than big data analysis,” Pegden says.
Williams envisions many other opportunities for Simio simulation to provide a picture of the industry. “We are likely to continue building out the mobile work force model so that eventually we will have a clear picture of the full impact that portability solution will have on the industry,” he says. “I can already feel new demand that says, ‘You’ve given me an answer that I didn’t expect. I want to know more.’ That will drive examination of the other segments of the industry.”
Simio LLC is a private company headquartered in Pittsburgh Pennsylvania dedicated to delivering leading edge solutions for the design, emulation, and scheduling of complex systems. Simio was founded by a highly experienced team. C. Dennis Pegden, Ph.D., Founder and CEO of Simio LLC, has over 30 years of experience in simulation and scheduling and has been widely recognized as an industry leader. He led in the development of SLAM (marketed by Pritsker and Associates) and then founded Systems Modeling Corporation. Dennis led the creation of the market-leading simulation products SIMAN® and Arena®, as well as the finite capacity scheduling product Tempo. To learn more visit Simio.
Retirement Clearinghouse, LLC is the leading provider of portability and consolidation services for defined contribution plans. Its integrated financial technology, data and information solutions facilitate automated consolidation of small, redundant accounts for sponsors to improve plan performance metrics, and enable participants, regardless of account balance, to seamlessly transport their retirement savings through every phase of their careers.