Insights: Research and White Papers
Summary: In this paper, authors Jean Young and Steve Utkus of Vanguard Center for Retirement Research take an in-depth look at Roth and the new American Taxpayer Relief Act of 2012 provision. They summarize current Roth adoption statistics, discuss considerations involved in making a conversion decision, and reveal why ATRA's expanded Roth conversion feature is likely to boost Roth adoption rates over time.
Source: Vanguard.com 
, May 2013
Summary: Mercer Bullard, a securities law specialist and University of Mississippi professor, reviewed an array of published research on the efficacy of defined contribution plan structures. He found plan sponsors have been protecting themselves from lawsuits by offering more 401k options, but at the expense of member participation and savings rates.
Source: Ai-cio.com, May 2013
Summary: Retirement systems around the world vary by government programs, employer benefits, and the need to augment those sources of retirement income with personal savings, but all face common challenges such as persistent economic uncertainty, longer life expectancies, declining working-age populations relative to retired populations, and financial and investment risks.
Source: Transamericacenter.org , May 2013
Summary: Nearly two-thirds (63%) of DC plan sponsors are using social media as a regular source of information for 401k plans and the providers that serve this market according to Cogent Research.
Source: 401khelpcenter.com, May 2013
Summary: An important conversation is trending among plan sponsors and fiduciaries of DC plans: the allocation of recordkeeping and administrative expense. In this paper, Lynn Formica, Director, Debt Capital Markets & Investments at Reed Elsevier Inc., discusses the changes their firm made to its 401k Plan in 2010, which included charging participants a direct fee to participate in the program. She addressed some of the most commonly-asked questions about adopting this type of approach and the reactions they received from their workforce.
Source: Nepc.com , May 2013
Summary: A new LIMRA research report, Exploring 403(b) Plan Practices and Trends: Healthcare and Higher Education, examines the two largest ERISA 403(b) market segments -- healthcare and higher education -- to understand the similarities and differences between the segments and how they compare with 401k plans.
Source: Limra.com, May 2013
Summary: Plan sponsors are combining educational activities with efforts to improve the overall participation experience. They're working to incorporate more technology-based approaches, such as social media, mobile applications, webcasts, podcasts and intuitively designed websites, to boost participants' financial acumen and retirement awareness and promote active engagement.
Source: Deloitte.com , May 2013
Summary: Do you wonder how women are faring when it comes to saving and investing for retirement? Are you concerned that many might be ill prepared? It's time to move away from old stereotypes and myths about women and money. Help female plan participants use their natural advantages for a more successful savings outcome.
Source: Fidelity.com , May 2013
Summary: The DOL's Advisory Opinion on Multiple Employer Plans, Advisory Opinion 2012-4, caused a stir in the PEO industry. This whitepaper discusses an alternative to a MEP. It does so in the context of addressing the "ASO" problem in a PEO. PEOs, regardless of their position with regard to the application of 2012-04 to their own lines of business, have a problem if they offer their MEPS on an a la carte basis, which is referred to as the ASO ("Administrative Services Only") business.
Source: Businessofbenefits.com , May 2013
Summary: Every day, Canadian pension plan sponsors must take stock of their programs to ensure financial and strategic needs are being met. Are your retirement programs meeting the challenge? Are they competitive? Are they addressing employee needs? Can they be sustained over the long-term? Every choice made has an impact on company financial results, employee engagement and satisfaction, workforce management, employee retirement income security, attraction and recruitment success, and even workforce productivity. This document provides an overview of survey results and features key action areas for pension plan sponsors in the coming months.
Source: Aon Hewitt , May 2013
Summary: The first quarter of 2013 closed with 13 completed merger and acquisition deals totaling $5.8 billion in assets under management within the independent registered investment advisor segment, according to industry-wide data compiled by Schwab Advisor Services. This marks the highest number of transactions recorded in this sector since the first quarter of last year.
Source: 401khelpcenter.com, May 2013
Summary: Analysis show that average balances in these small business retirement savings plans increased 20 percent since 2007, and jumped an average of 64 percent over 2008 when balances were generally at their lowest point. The analysis also indicates small business owners and their employees continued to increase contribution rates as the economy emerged from the financial crisis five years ago.
Source: 401khelpcenter.com, May 2013
Summary: This guide provides an outline of the roles and responsibilities of the primary service providers and resources a plan sponsor and plan administrator will engage. It is organized by investment complexity to more clearly demonstrate the many sources necessary to support the required data disclosures and calculations. The Matrix in Section 2 provides a high level summary of factors to consider with complex fund structures. The sections that follow provide more detailed information and explanation.
Source: Defined Contribution Institutional Investment Association , May 2013
Summary: This 2013 Guide to ERISA Reporting and Disclosure was prepared by PwC's Human Resource Services practice to help plan sponsors, plan administrators, plan trustees, attorneys and accountants comply with the reporting and disclosure requirements of the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code.
Source: Pwc.com , April 2013
Summary: According to Maritz Research's recent Retirement Study, which surveyed 1,000 near and recent retirees, those with investment savings of $500,000 or more view their retirement much more positively than those with less than half a million in savings. Those with savings above this perceived tipping point are more optimistic regarding their financial security, less concerned about having enough money to last through retirement, feel more prepared for rising health care costs and feel they are less likely to have to work at some point during their retirement.
Source: Maritzresearch.com , April 2013
Summary: Defensive Plan Building is the process of systemically building out plan documents, procedures and operations in manners that will limit the likelihood of a plan sponsor or fiduciary being sued while increasing the likelihood that, if sued, they will win the case in the end. Over the past couple of years, doctrinal shifts related to remedies available to participants under ERISA have made Defensive Plan Building even more important. Article discussed this concept in greater detail.
Source: Bostonerisalaw.com , April 2013
Summary: White paper suggests that the model described in the paper, if scaled and extended to the entire DC industry, could meet the goal of a 50 percent reduction in leakage/cash-outs that the Employee Benefit Research Institute has targeted, thus having the potential to add $1.3 trillion to DC retirement savings over 10 years.
Source: Bostonresearch.com , April 2013
Summary: White paper highlights best practices for improving retirement plan effectiveness. The research found that increasingly stringent fiduciary requirements are driving plan sponsors to seek more and more detail about overall plan performance, as well as the savings and investing behavior of individual employees. It identifies several retirement plan features that help drive overall retirement readiness.
Source: TIAA-CREF , April 2013
Summary: For the DC plan system to survive, employers must revisit the purpose of the plan. Returning to the primary purpose of providing retirement benefits will require sponsors, and the vendors they hire, to communicate with participants in a manner that allows a participant to reasonably estimate how the factors within their control -- contribution rate, investment choices, time horizon, and spending needs -- impact their retirement success.
Source: Multnomahgroup.com, April 2013
Summary: Defined contribution plan assets are a significant component of Americans' retirement assets, representing more than one-quarter of the total retirement market and almost one-tenth of U.S. households' aggregate financial assets at year-end 2012. To measure participant-directed changes in DC plans, ICI has been tracking participant activity through recordkeeper surveys since 2008. This report updates results from ICI's survey of a cross section of recordkeeping firms representing a broad range of DC plans. The broad scope of the recordkeeper survey provides valuable insights about recent withdrawal, contribution, asset allocation, and loan decisions of participants in these plans.
Source: Investment Company Institute , April 2013
Summary: This article presents two checklists focused on the monitoring of 401k plan investments. The first takes a macro view, itemizing common issues that warrant a deeper dive for fiduciary understanding. The second relates solely to target date funds, in order to assure attention to eight items that the Department of Labor identified in a notice issued earlier this year.
Source: Erisacloud.com, April 2013
Summary: Transamerica released a report titled, "Retirement Plans for Institutions of Higher Education," that shows Higher Education institutions outperform the corporate sector when it comes to faculty and staff deferral rates and plan design practices that can generate successful retirement outcomes. Among those surveyed, the average deferral rate for faculty and staff is currently 13.4 percent.
Source: 401khelpcenter.com, April 2013
Summary: It is time to rethink how QDIAs, especially TDFs, operate within qualified retirement plans. At their core, if defined contribution plans are going to be the lifeblood of American retirement, they must be prudent, conflict-free and transparent. QDIAs is where it begins. It behooves us as fiduciary designees to lead the movement.
Source: Fi360.com , April 2013
Summary: PSCA's snapshot survey on the impact of fee disclosure regulations on participants was conducted in October 2012, and received 176 responses from defined contribution plan sponsors. The fee disclosure information that participants received seems to have had little impact their behavior.
Source: 5500audit.com , April 2013
Summary: According to a survey of defined contribution plan participants by Transamerica Retirement Solutions, 65 percent of participants age 50 or older are interested in having a guaranteed income option in their defined contribution plan; and 43 percent said if they had the choice, they would invest in one now.
Source: 401khelpcenter.com, April 2013
Summary: Australia's retirement income system is regarded by some as among the best in the world and is often pointed to as a model for 401k reforms. It has achieved high individual saving rates and broad coverage at reasonably low cost to the government, but the Australia system does have shortcomings. This white paper provides an overview of the system and recent reforms. The paper concludes that the recent reforms should strengthen Australia's system and provide lessons to other nations that increasingly depend on 401k-type individual accounts.
Source: Center for Retirement Research , April 2013
Summary: PIMCO's DC Practice has prepared the 2013 Defined Contribution Consulting Support and Trends Survey to help understand the breadth of views and specific consulting services available within the DC marketplace. The 2013 survey captures data, trends and opinions from 51 consulting firms across the U.S. which serve over 6,500 clients with aggregate DC assets in excess of $2.4 trillion.
Source: Center for Due Diligence , April 2013
Summary: Beneficiary payouts from either retirement or life insurance plans can get sticky. A new report by the 2012 ERISA Advisory Council looked at the challenges and best practices concerning beneficiary designations, focusing on steps that plans and service providers can take to ensure the proper beneficiary receives the intended benefit payment from the plan.
Source: Benefitspro.com, April 2013
Summary: The number of people taking loans from their 401k retirement accounts increased 28% in the fourth quarter from a year earlier as older workers tapped their savings, according to Wells Fargo & Co. The number is based on 1.9 million survey participants who have 401k's administered by the company, of which 34,987, or about 1.8%, took out loans.
Source: Benefitnews.com, April 2013
Summary: A recent report published by the Retirement Advisor Council shows plan sponsors turning to formal RFP searches to find the correct retirement plan advisor for their plan. Formal RFP searches have been firmly embraced by plan sponsors and are now the standard method for selecting a professional retirement plan advisor in many segments of the employer population.
Source: 401khelpcenter.com, April 2013
Summary: 401ks aren't perfect; but not broken. It's the 401k operators -- employees -- who lack the understanding and motivation to use them successfully. Unless 401k education is fixed, 401k's will continue to provide too little retirement income to too many Americans. 401k education started wrong and changed little in 30 years. We need adult-education experts to help fix it.
Source: Dennisackley.com , April 2013
Summary: A recent report published by the Retirement Advisor Council shows plan sponsors turning to formal RFP searches to find the correct retirement plan advisor for their plan. Formal RFP searches have been firmly embraced by plan sponsors and are now the standard method for selecting a professional retirement plan advisor in many segments of the employer population.
Source: 401khelpcenter.com, April 2013
Summary: The downward trend in average expense ratios paid by investors in mutual funds continued during 2012, according to an annual Investment Company Institute report on fund expenses and fees. This trend is reflected in both long-term mutual funds (equity, bond and hybrid funds) and money market funds.
Source: Investment Company Institute, April 2013
Summary: African American investors report high levels of confidence in their financial future, along with optimism about the political and economic future of the country, according to a recent Wells Fargo nationwide survey. Despite proactive planning and intentional cuts in spending, African American investors remain focused on day-to-day living expenses, with a large majority concerned about having enough money to retire.
Source: 401khelpcenter.com, April 2013
Summary: The 2012 ERISA Advisory Council studied current challenges and best practices concerning beneficiary designations in retirement and life insurance plans. The Council examined the issues surrounding attempts to pay the correct plan beneficiaries in a timely manner and to improve plan design and administrative practices to ensure that the participant’s intent is carried out. In particular, the Council focused on steps that plans and service providers can take to ensure the proper beneficiary receives the intended benefit payment from the plan.
Source: U.S. Department of Labor, April 2013
Summary: Defined contribution plans have experienced significant growth in the adoption of automatic savings programs since the 2006 introduction of the Pension Protection Act. While these programs have generally delivered laudable results, their progress can be hindered by certain plan designs. This paper explores the solutions to these design issues.
Source: Troweprice.com , April 2013
Summary: This paper seeks to provide a framework for designing DC menus to improve plan participant experiences and outcomes. First, it will review how menu design has evolved historically; then it will discuss the objectives and philosophies of various sponsors, and define menu construction frameworks for each philosophy. Finally, it presents considerations for creating an effective investment menu.
Source: Defined Contribution Institutional Investment Association , April 2013
Summary: The rate of growth for cash balance plans is significantly higher than for 401k plans, according to Kravitz, Inc. Highlights from Kravitz's 2013 Cash Balance Research Report reveals the number of new cash balance plans added in 2011 was 1,097, for a national total of 7,927.
Source: Plansponsor.com, April 2013
Summary: The retirement savings of American households took a big hit when the stock market crashed in 2008. Since then, however, a good portion of these losses has been reversed. This fact sheet reports the value of assets held in retirement accounts and defined benefit plans and how they have changed since 2007-before the stock market crash and the Great Recession.
Source: Urban.org , April 2013
Summary: This white paper illustrate ways that costs can be managed when adopting automatic program features by altering plan design components, demonstrate how foundational plan design components and automatic programs can interact to drive success in achieving specific plan objectives, and provide a decision-making guide for revisiting plan design elements.
Source: Troweprice.com , April 2013
Summary: Money management firms frequently offer workers misleading and self-serving information about how to handle their retirement savings when they change jobs, according to a Government Accountability Office report to be released Wednesday.
Source: Washingtonpost.com, April 2013
Summary: Among other things, GAO recommends that Labor and IRS should take certain steps to reduce obstacles and disincentives to plan-to-plan rollovers. Labor should also ensure that participants receive complete and timely information, including enhanced disclosures, about the distribution options for their 401k plan savings when separating from an employer.
Source: United States Government Accountability Office , April 2013
Summary: Nearly all investment consultants think clients should offer 401k plan participants target-date or target risk strategies and most believe that active management and reducing risk are important elements of investing globally for retirement, according to the 7th Annual Defined Contribution Consulting Support and Trends Survey.
Source: 401khelpcenter.com, April 2013
Summary: The performance gap between DC plans and DB plans suggests that DC plan participants are missing out on the diversification and performance benefits available to DB plans. The strategic incorporation of alternatives into DC plans can play a role in closing this performance gap as plan sponsors, investment managers, and intermediaries innovate to bring solutions to the DC participants.
Source: DCIIA.com , April 2013
Summary: A report of "Legislative and Regulatory Developments Plan Sponsors Need to Follow in 2013" published by the Retirement Advisor Council reveals strong employer objections to state-run plans such as those recently proposed by legislatures in California and Massachusetts.
Source: 401khelpcenter.com, April 2013
Summary: Total U.S. retirement assets hit a new record high of $19.5 trillion as of December 31, 2012, up 0.7 percent in the fourth quarter and up 8.6 percent for the year. As of the end of 2012, retirement assets were 44.4 percent higher than they were on March 31, 2009, when retirement assets hit a low during the recession, and 7.9 percent higher than their pre-recession peak on September 30, 2007.
Source: ICI.org, March 2013
Summary: Significant changes have occurred in the kind of employment-based retirement plan in which private-sector workers participate.
Source: EBRI.org , March 2013
Summary: This paper finds that both the use of on-line calculators and seeking the advice of financial advisors result in estimated savings targets that not only increase the estimated probability of retirement income adequacy, but also result in double-digit percentage-point increases for many of the groups when analyzed by relative income quartiles and family/gender combinations.
Source: EBRI.org , March 2013
Summary: Employees who say they use advisory services offered to them in their 401k plan have a distinctly more positive outlook about their future retirement versus those who do not, according to an analysis of data from the recent Mercer Workplace Survey. Nearly one-fifth (18%) of survey respondents say they engage with an online or in-person advisory service in their 401k plan.
Source: 401khelpcenter.com, March 2013
Summary: This White Paper evaluates how American workers and company-sponsored retirement plans have fared during these past five difficult years, and brings to light opportunities to improve our current retirement system.
Source: Transamericacenter.org , March 2013
Summary: This UK paper debates the pros and cons of daily liquid funds in DC plans. The reality is that this practice within DC plans effectively shuts the door on many alternative and less liquid asset or at least limits the availability of high-quality and efficient implementation vehicles. This means forfeiting both the investment efficiency that could otherwise be achieved through more effective diversification, as well as potentially additional sources of investment returns -- both aspects which many DB plans do take advantage of.
Source: Towerswatson.com, March 2013
Summary: This paper assesses the effects of personality traits on economic preparation for retirement, wealth accumulation, and consumption, among persons 66 to 69 years of age. Among the five chief personality traits of neuroticism, extroversion, agreeableness, conscientiousness, and openness, paper focuses most on conscientiousness.
Source: Michigan Retirement Research Center , March 2013
Summary: Employers could use auto-escalation as a way to encourage 401k participants to increase their contributions and reduce the number of employees missing out on matching contributions from the plan sponsor. That's the finding by WorldatWork and the American Benefits Institute, which said that nearly a third of U.S. retirement plan sponsors they surveyed think more than half of their plan participants are "leaving money on the table" by failing to contribute enough to receive company matching contributions.
Source: Thompson.com, March 2013
Summary: This white paper focuses on the critical responsibilities plan sponsors have in the areas of investment choice selection and monitoring. It examines the resources available to help them manage these duties, including 3(21) investment fiduciary services and 3(38) investment fiduciary management.
Source: Transamerica Corporation , March 2013
Summary: The federal government provides generous tax subsidies for retirement saving in 401ks and IRAs. The subsidies are designed to increase household saving and retirement income security, important national goals. Given the nation's severe budgetary pressures, it is critical to know how effective these subsidies are in raising household saving and whether other approaches would be more cost-effective.
Source: Center for Retirement Research , March 2013
Summary: This white paper is designed to help senior finance executives prepare for the implementation of the fee disclosure regulations and to illuminate how companies can use these new regulations as an opportunity to not only improve 401k offerings, but also win back the faith of their employees.
Source: CFO.com, March 2013
Summary: Americans' confidence in their ability to afford a comfortable retirement remains low -- which may reflect a growing awareness of the savings realities ahead, according to the 23rd annual Retirement Confidence Survey (RCS), the longest-running survey of its kind.
Source: 401khelpcenter.com, March 2013
Summary: Data from late 2012 show women in the United States closing the gap in defined contribution plan balances and savings rates compared with their male counterparts, but gaps remain in women's retirement funding strategies that plan sponsors can help address.
Source: Thompson.com, March 2013
Summary: Despite an uncertain tax and regulatory environment, retirement plan sponsors are not shying away from the added expense of hiring third party administrators to help manage their 401k and 403(b) retirement plans. If anything, TPAs are more popular than ever because they help companies better navigate the murky, and sometimes choppy, regulatory waters.
Source: Benefitspro.com, March 2013
Summary: Nearly three-quarters (73 percent) of Americans find thinking about retirement saving and investing to be a source of stress and anxiety, according to findings from the 2013 Franklin Templeton Retirement Income Strategies and Expectations (RISE) survey.
Source: 401khelpcenter.com, March 2013
Summary: Financial advisers continue to put off planning their own retirement even though a huge majority of them are at least 50, a new survey shows. About 68% of advisers have no formal succession plan for their business, according to an SEI survey of 100 advisers. Of those with a plan, about 39% said they still aren't sure to whom they will transition their business.
Source: Investmentnews.com (free registration may be required), March 2013
Summary: Even through volatile economic conditions, employers have demonstrated an unwavering commitment to the 401k system according to a study released today by WorldatWork in partnership with the American Benefits Institute. Despite anecdotal reports of companies suspending or eliminating their 401k match to cut costs during the depths of the recession, 88% of respondents said their company maintained matching contributions during the previous five years.
Source: Worldatwork.org , March 2013
Summary: Target-date funds could claim the largest share of defined contribution plan asset allocations within the next five years based on the funds' current growth rate, said Lori Lucas, executive vice president and defined contribution practice leader at Callan Associates.
Source: Pension and Investments (free registration may be required), March 2013
Summary: Small 401k accounts of former employees increase plan costs, expand administrative obligations and extend fiduciary responsibilities. Plan sponsors should consider distributing these accounts under a well-defined process and regulatory safe harbors, and advisers can provide a valuable service to their clients by educating them on the benefits of mandatory distributions and helping them set up a routine process for sweeping out small accounts.
Source: Fredreish.com, March 2013
Summary: Living longer has its rewards. Middle-income retirees say they are having experiences in retirement that they never imagined, such as travel and volunteering. However, longevity also comes with risk, the two primary concerns being declining health that is associated with age, and the ability to create a sustainable retirement income that may need to last 20 years or more. Paper looks at longevity's impact on the retirement experience of middle-income Americans and their view on the role Social Security plays as the cornerstone of retirement income.
Source: Center for a Secure Retirement , March 2013
Summary: It might seem obvious that letting a mutual fund firm administer a 401k plan and also provide the investment options is as bad as letting a fox guard the henhouse. The risk, of course, is that the mutual fund recordkeeper would recommend its own funds. It might also seem obvious that the industry trend for plans with open architecture -- giving participants equal access to virtually every investment option in the marketplace -- has solved this problem. Actually, nothing about that whole relationship is what it seems, according to a new academic paper.
Source: Institutionalinvestor.com, March 2013
Summary: Screaming headlines of dubious reports purporting that 401k plan participants raiding their retirement savings are au courant these days. But a Bank of America Merrill Lynch study suggests an opposite trend, and the fact that Merrill's retirement plan management encompasses 2.5 million total plan participants and plan assets of $98.1 billion gives weight to the study's quite upbeat conclusion: that 2012 was a model year and that Americans are fortifying their retirement readiness.
Source: Benefitspro.com, March 2013
Summary: As Congress considers tax and budget reforms in the coming weeks and months, a study by the Investment Company Institute shows that U.S. households strongly believe lawmakers should maintain current tax incentives for retirement savings. The study finds that 85 percent of the 4,000 households surveyed disagreed with the statement, "The government should take away the tax advantages of defined contribution accounts," such as 401ks.
Source: Investment Company Institute, March 2013
Summary: The latest 401k Wellness Scorecard reveals quarter-over-quarter and year-over-year trends in plan participant behaviors along with employers' adoption of 401k design features in plans serviced by Bank of America Merrill Lynch.
Source: Bank of America , March 2013
Summary: Despite a general sense of confidence in their financial readiness for retirement, affluent Americans might be overlooking critical tenets of retirement planning, according to a new Schwab survey of approximately 1,800 investors across nine major U.S. markets. More than eight in 10 (84 percent) investors say they have a retirement plan in place, and 80 percent of these respondents say they are confident about their financial readiness for retirement.
Source: 401khelpcenter.com, March 2013
Summary: Kiplinger, with the help of BrightScope, a retirement-program data collector that ranks 401k plans, has released its list of mutual fund studs and duds found in 401k and 403(b) plans.
Source: Financial-Planning.com, March 2013
Summary: Fully half of defined contribution participants still do not know how much they pay in fees and expenses, even after the implementation of new fee-disclosure regulations last year, according to a new survey from Limra. Prior to the disclosure notices, 50% of participants in a survey did not know how much they paid in fees and expenses; the same percentage still does not know. There was some improvement elsewhere, however.
Source: Financial-Planning.com, March 2013
Summary: The Transamerica Center for Retirement Studies has uncovered the fact that nearly half of women (48 percent) do not have any retirement strategy at all, despite the fact that 56 percent of women expect to self fund their retirement through 401ks, retirement accounts, or other savings and investments. The Center's latest study, "Juggling Current Priorities and Long-Term Security: Every Woman Needs Her Own Retirement Strategy," sheds light on women's attitudes and behaviors related to saving and planning for retirement, and offers details about how they compare to their male counterparts.
Source: 401khelpcenter.com, March 2013
Summary: Target-date retirement funds have become an increasingly popular investment option in 401k plans and similar employee-directed retirement plans. The U.S. Department of Labor's Employee Benefits Security Administration prepared this general guidance paper to assist plan fiduciaries in selecting and monitoring TDFs and other investment options in 401k and similar participant-directed individual account plans.
Source: U.S. Department of Labor , March 2013
Summary: The evolution of professionally managed solutions, such as target date funds, has helped to address the investment variable in the retirement readiness equation for many plan participants. However, given the uncertainty of future investment returns due to the inability to control the market environment, it is critical that participants maximize the other variables, over which they have control, namely how much they save and the length of time they save for retirement. This white paper examines the ways that plan sponsors can help participants with varying levels of engagement save for retirement at more meaningful levels.
Source: Manning-Napier.com, March 2013
Summary: Fidelity unveiled an analysis of nearly one million investors using both a workplace savings plan and an Individual Retirement Account. The findings show a combined average balance of $225,600 as of Dec. 31, 2012, which is nearly three times higher than the average Fidelity 401k balance of $77,300. The analysis is a leading indicator of Americans' retirement readiness because it provides a more comprehensive look at two of the most popular retirement savings vehicles.
Source: 401khelpcenter.com, February 2013
Summary: With the recent growth in target-date funds and pooling of strategies in these funds, the traditional benefits of asset pooling are now increasingly available to DC plans. However, before further improvements can happen, regulations and the emphasis on the perceived benefits of daily valuation and daily liquidity need to reflect something more akin to global best practices. This paper discusses these views in more detail, beginning with the benefits of asset pooling and illiquid investments, before addressing impediments to change.
Source: Towerswatson.com, February 2013
Summary: A set of reforms to the existing system should make the saving incentives offered through the U.S. tax code more effective at a lower cost. The organizing principle is that tax savings incentives are reduced for higher-income households since such programs appear to be having little effect on the overall saving of this group, with some of the revenue from the reduction in subsidies put toward making saving easier and more attractive for low- and moderate-income households.
Source: Brookings Institution , February 2013
Summary: According to the 13th Edition of the 401k Averages Book, small plan average investment expense went from 1.38% to 1.37%, while the large plan average investment expense declined from 1.05% to 1.00%.
Source: 401khelpcenter.com, February 2013
Summary: A new nationwide public opinion research report finds overwhelmingly support for Congressional action to provide all Americans with access to a new type of privately run pension plan. The research also finds that Americans remain highly anxious about their retirement prospects (85 percent), and see pensions a way to improve their retirement readiness.
Source: 401khelpcenter.com, February 2013
Summary: Plan fiduciaries have a duty to ensure the plan's investment funds, including any TDFs, have been selected in accordance with the high standards of care under ERISA, including the duty of prudence. To discharge this duty, the plan sponsor should conduct an independent investigation of the merits of its particular TDF series, giving appropriate consideration to the relevant investment characteristics and features of the series and its component funds. Paper reviews some key consideration.
Source: Wagnerlawgroup.com , February 2013
Summary: Every year it is important to review the requirements for operating your 403(b) retirement plan. Use this checklist to help you keep your plan in compliance with many of the important rules. You can avoid this mistake by having a better understanding of what makes an organization eligible to sponsor a 403(b) plan and knowing if your organization meets one of the requirements.
Source: Sparkinstitute.org , February 2013
Summary: Using data on the retirement savings plans of three firms, authors studied the impact of default options on low-income versus high-income employees. The evidence consistently suggests that low-income employees are more influenced by defaults. The particularly powerful impact of defaults on low-income individuals may be an argument for setting defaults that conform most closely to the interests of these individuals.
Source: Retirementmadesimpler.org , February 2013
Summary: This article is not meant to compare the advantages and disadvantages of DC and DB plans; rather, it is meant to promote a new retirement paradigm where both types of plans can coexist and complement one another. This new retirement paradigm will recognize the existing DC plan as the primary retirement vehicle and view the DB plan as a secondary plan sponsored by private sector employers. This paper offers this retirement model as a contribution to the solution of the longevity risk problem.
Source: Milliman.com , February 2013
Summary: The importance of benefits in choosing a job remains high, despite a recent decline. Health insurance continues to be by far the most important employee benefit: 6 in 10 (58 percent) list health insurance as the most important benefit, followed by 18 percent who cite a retirement savings plan.
Source: Employee Benefit Research Institute , February 2013
Summary: In 2010, the U.S. Department of Labor proposed changes that would eliminate third-party incentive payments, such as 12b-1 fees. The investment industry argues that eliminating these fees could force broker-dealers to charge directly for advice, which could result in less advice being provided and customers making poor investment decisions. This paper examines the tradeoff between lower fees and investor mistakes due to forgoing advice.
Source: Center for Retirement Research, February 2013
Summary: This survey provides a listing of various types of providers to 403(b) plans, including the services each one provides as well as information on which 403(b) market segment(s) each one serves.
Source: Plansponsor.com, February 2013
Summary: PSCA is conducting its fifth annual survey of 403(b) plans. Participate in PSCA's 2013 403(b) Plan Survey and receive a free copy of the results. The deadline for participation is March 15, 2013.
Source: Plan Sponsor Council of America, February 2013
Summary: This white paper discusses the importance of helping plan participants pursue retirement readiness, and the relevant rules under ERISA. It will also include suggested best practices that should be considered by plan sponsors and other fiduciaries to assist plan participants prepare for their retirement years.
Source: Wagnerlawgroup.com , February 2013
Summary: Fidelity released its quarterly analysis of 401k plans, which showed the average balance had increased to another record high by the end of 2012. The average 401k balance hit $77,300 at the end of the year, up from $69,100 one year earlier, an increase of 12 percent.
Source: 401khelpcenter.com, February 2013
Summary: U.S. workers who stayed put in the same company 401k plan for the past decade saw the size of their accounts quadruple to an average of nearly $200,000, despite major stock market turmoil, Fidelity Investments said recently.
Source: Reuters.com, February 2013
Summary: The US mutual fund industry is set to surpass $15 trillion in assets in February (open- and closed-end funds, and including ETFs), according to Strategic Insight. This new industry milestone is achieved by the combination of continued stock market appreciation and renewed investor demand for stock and bond funds.
Source: 401khelpcenter.com, February 2013
Summary: An increasing number of U.S. employers are planning to add Roth options to their 401k, 403(b) or other defined contribution plans in 2013, a January 2013 survey by consultancy Aon Hewitt reveals. This comes on the heels of legislation that makes it easier for defined contribution investors to convert balances within their savings plan into Roth accounts.
Source: Society for Human Resource Management, February 2013
Summary: Win-loss survey data shows the proportion of plan sponsors remaining with the incumbent after conducting full 401k provider searches has continued to grow.
Source: Planadviser.com, February 2013
Summary: Every quarter, Blue Prairie Group updates its stable value database based on questionnaire results from 17 leading stable value providers. They have just released their most recent findings summarized here.
Source: 401khelpcenter.com, February 2013
Summary: Target maturity funds picked up more than $13 billion in the fourth quarter of 2012, bringing the industry's total assets to some $485 billion, a 29% increase from a year ago, according to data from Ibbotson Associates.
Source: Financial-planning.com, February 2013
Summary: Early automatic programs were an important first step to overcoming employee inertia. The next step is to evolve these programs and combine them in ways that produce greater results per dollar of employer cost. This paper explores the merits of solutions that involve the following: Auto-enrollment for employees at higher initial default rates; Auto-enrollment for employees who are not currently enrolled; Auto-increases in deferral rates on an opt-out basis; and, Auto-investing in a qualified default investment alternative (QDIA).
Source: Troweprice.com , February 2013
Summary: The possibility of tax reform will be on everyone's minds in 2013 and retirement issues are bound to get swept up in the tide, practitioners told BNA in a series of interviews in the first half of January about their predictions for this year.
Source: Pensionrights.org , February 2013
Summary: A new survey by Aon Hewitt reveals an increasing number of U.S. employers are planning to add Roth features to their defined contribution plans in 2013. This comes on the heels of new legislation that makes it easier for DC investors to convert balances within their savings plan into Roth accounts.
Source: 401khelpcenter.com, February 2013
Summary: Younger retirement plan participants are more likely to use online retirement calculators, interactive charts and mobile apps in preparing for retirement than older counterparts. OneAmerica announced new results from its retirement participant survey that reveal this digital divide when it comes to the use of technology in preparing for retirement.
Source: 401khelpcenter.com, February 2013
Summary: This report examines the following points: 1) Individuals are not well prepared to manage their income in retirement on their own. 2) Including guaranteed income options within employment-based defined contribution plans as a consideration for retirement planning. 3) Advantages of providing guaranteed income options through employment-based defined contribution plans for both employees and employers. 4) Challenges around providing guaranteed income options through employment based defined contribution plans.
Source: Insured Retirement Institute , February 2013
Summary: With more workers approaching retirement, saving is a high priority. Automatic enrollment 401k plans are an effective way to get employees to save now and to continue saving.
Source: U.S. Department of Labor , February 2013
Summary: Regulatory mandates, economic uncertainty and dwindling retirement confidence among America's workers are among the key factors shining a spotlight on the role retirement plan fiduciaries play in helping workers save and safeguard retirement assets. Plan sponsors are increasingly looking to retirement plan advisors for guidance. This brings potential business opportunities but also more regulatory scrutiny. Advisors must know when their plan sponsors are acting as fiduciaries and the steps to take to avoid breaching their duties. This practice guide answers five questions for retirement plan advisors.
Source: Broadridge.com (free registration required), February 2013
Summary: Historically low interest rates, which cause plan liabilities to increase every time they drop, appear to have nearly hit bottom and are poised to begin rising as soon as the Federal Reserve suspends the accommodative support of growth through an expansionary monetary policy. Other underlying macroeconomic trends such as the 30-year bull market in bonds, the decade-long stagnation in the equity markets and the lack of viable options to extend duration for pension investment managers, all exhibit signs of changing for the better.
Source: Pentegra.com , January 2013
Summary: A recent study found that tax incentives for retirement savings in Denmark had virtually no impact on increasing total savings. But are those findings relevant to the United States?
Source: 401khelpcenter.com, January 2013
Summary: Only 47 percent of small businesses (2-99 employees) in the United States offer benefits to their employees, the lowest level in two decades of LIMRA research.
Source: 401khelpcenter.com, January 2013
Summary: If you serve on a plan committee and are considering adding an advisor or replacing one, you will want to delve into the details to ensure you get the best possible fit for your plan. Here are some of the points we recommend exploring when considering a plan advisory firm.
Source: 401khelpcenter.com, January 2013
Summary: Twenty-four percent of Canadian pre-retirees (working, age 50-65 with at least $50,000 in investible assets) are not confident that they will be able to live comfortably in retirement and about half of Canadian pre-retirees expect to have a lower standard of living compared with their existing lifestyle, according to a new study by LIMRA.
Source: 401khelpcenter.com, January 2013
Summary: When it comes to saving more for retirement, most employees are eager for more support and they want their employer to automatically increase their savings rate, according to the most recent survey of US workplace retirement plan participants released by State Street Global Advisors.
Source: 401khelpcenter.com, January 2013
Summary: As the financial landscape continues to evolve in a challenging economic environment, workers are under more pressure than ever before to save for their future. A new survey by Aon Hewitt reveals that improving the financial wellness of their workforce has become a bigger priority for many employers.
Source: 401khelpcenter.com, January 2013
Summary: Boston-based global analytics firm, Cerulli Associates, estimates that public and private defined contribution plan assets will reach $7.3 trillion by 2017. The 401k market is the largest driver of growth in the private DC industry, and it remains the largest component of the market.
Source: 401khelpcenter.com, January 2013
Summary: Americans participating in 401k and 403(b) plans aren't getting the support they desire from their employers when it comes leveraging features that can help them reach their retirement goals. This and other findings are included in The Participant's Retirement Plan, a new report released this month by Cogent Research.
Source: 401khelpcenter.com, December 2012
Summary: Research released by J.P. Morgan Asset Management confirms decade-long patterns of suboptimal savings behavior among defined contribution plan participants. Real-world activity among savers is more unpredictable than many fund managers assume in their fundamental design, often resulting in too much volatility being embedded in target-date funds.
Source: 401khelpcenter.com, December 2012
Summary: Franklin Templeton engaged independent market research firm Chatham Partners to conduct interviews with organizations that have recently completed a retirement plan bid process in order to gain direct insight into the elements that influenced their advisor selection.
Source: 401khelpcenter.com, November 2012
Summary: Nearly 80% of the more than 6,000 companies that participated in the 2012 Plansponsor Defined Contribution Survey doubt their employees will achieve retirement goals by age 65. A large number of company respondents indicate a decline in satisfaction with 401k providers.
Source: 401khelpcenter.com, November 2012
Summary: Third quarter data for defined contribution plans administered by MassMutual shows that, combined, Gen X and Gen Y participants now account for 55% of the company's participant count, compared to 41% of Baby Boomer participants.
Source: 401khelpcenter.com, November 2012
Summary: As Americans emerge from the Great Recession, confidence in a future retirement sets in for people who have $250,000 or more in investable assets, according to the latest findings from the Wells Fargo Affluent Retirement Survey. While an overwhelming majority (88%) of affluent Americans "feel confident" they will have saved enough for the life they want in retirement, far fewer Americans with less than $250,000 in investable assets (57%) have confidence in their retirement savings.
Source: 401khelpcenter.com, November 2012
Summary: When it comes to deciding which DC plan providers to recommend to clients, advisors prioritize their own needs. However, once a plan is in place advisors are most loyal to providers that effectively demonstrate their value and serve the needs of sponsors. This means providers need to deliver effectively for both advisors and sponsors if they want to win and keep more business.
Source: 401khelpcenter.com, November 2012
Summary: More than a third of Baby Boomers surveyed said they expect Social Security to be a "major source of income in retirement." Yet only one in four have confidence the system will have money to pay benefits throughout their retirement; nearly 40 percent were not at all confident, according to the latest MFS Investing Sentiment Survey.
Source: 401khelpcenter.com, November 2012
Summary: A new Pentegra Retirement Services survey revealed that nearly one-third (32%) of U.S. adults who would like to retire do not know if they will be able to retire or do not believe they will ever be able to retire. Only 19% -- nearly one in five adults -- said that they will be able to retire at age 65.
Source: 401khelpcenter.com, November 2012
Summary: Financial Finesse has released its third quarter research for 2012 on trends in employee financial issues. The report found employees' financial wellness improved in most financial planning categories up to, and in some cases surpassing, 2011 levels. This comes after an impressive climb back from faltering wellness levels in the first quarter of the year.
Source: 401khelpcenter.com, November 2012
Summary: Small business owners know the value of a solid business plan. Unfortunately, too many of those entrepreneurs neglect to place the same effort in planning for their retirement. Business owners focus so much on growing and maintaining their business, that often their own retirement is put on the back burner.
Source: 401khelpcenter.com, October 2012
Summary: An obstacle looms in the distance: millions of Americans who are underprepared for retirement with diminishing prospects for how to manage their future and avoid poverty. Half of middle class Americans (52%) say their most important day-to-day financial concern is paying the monthly bills, up from 37% a year ago according to the latest results from the annual Wells Fargo Retirement Survey.
Source: 401khelpcenter.com, October 2012
Summary: As defined contribution plans evolve into the primary retirement savings vehicle for American workers, a new study from Northern Trust suggests they could improve retirement outcomes for participants by adopting practices developed over decades by defined benefit plans and other institutional investors.
Source: 401khelpcenter.com, October 2012
Summary: Diversified announced the availability of Report on Retirement Plans 2012: Bridge to Your Retirement Success, a study on the trends influencing defined contribution (DC) and defined benefit (DB) plans of U.S. corporations with more than 1,000 employees. Designed to provide plan sponsors and advisors with comprehensive benchmarking data, the report explores how the retirement savings environment is evolving as defined benefit plans are increasingly displaced with defined contribution plans.
Source: 401khelpcenter.com, October 2012
Summary: Despite being more concerned about the potential risks they face in retirement than men, a new study by LIMRA found that fewer women had completed any of the basic retirement planning activities (determining expenses and income, calculating assets, etc.). Thirty-two percent of women said they had done no retirement planning.
Source: 401khelpcenter.com, October 2012
Summary: The number of large U.S. companies offering new salaried employees only a defined contribution (DC) plan, such as a 401k plan, continued to increase this year, according to an annual analysis by Towers Watson. The analysis found that only three in 10 of these companies currently offer a defined benefit (DB) pension plan to newly hired salaried workers.
Source: 401khelpcenter.com, October 2012
Summary: AllianceBernstein announced new research showing that although more than 50% of plan sponsors surveyed offer target-date funds (TDFs) in defined contribution plans, only half of them are using TDFs as their default and are therefore missing out on critical fiduciary safe harbor protection available under the Pension Protection Act of 2006.
Source: 401khelpcenter.com, October 2012
Summary: Participants prefer more pro-active steps to increase their retirement readiness and provide them with more analysis, solutions and a better understanding of the tools and guidance the plan provider has to help them optimize the use of their retirement plan.
Source: 401khelpcenter.com, October 2012
Summary: According to the tenth annual survey of healthcare plan sponsors released today by Diversified and the American Hospital Association, a record number of healthcare organizations are offering defined contribution plans with enhancements that include automatic enrollment and automatic deferral escalation to accomplish their most important goal: to help employees accumulate income for retirement.
Source: 401khelpcenter.com, September 2012
Summary: Although fewer American families are participating in a retirement plan at work, more of those with a plan are in a 401k. At the same time, ownership of individual retirement accounts (IRAs) is falling, according to a new report by the nonpartisan Employee Benefit Research Institute (EBRI).
Source: 401khelpcenter.com, September 2012
Summary: A nationwide poll, conducted by BlackRock, Inc. of 1,035 retired Americans and 1,002 American workers participating in DC retirement plans, has found that most workers are failing to save as much as they could for retirement -- risking the regret now felt by retirees who had made that same mistake.
Source: 401khelpcenter.com, September 2012
Summary: In advance of the 2012 benefits enrollment season, Guardian released a study that shows a strong relationship still exists between an employee's benefits enrollment experience and their perceived value of the benefits that their employer offers.
Source: 401khelpcenter.com, September 2012
Summary: Cerulli's latest research measures the performance of advisor-directed accounts compared to packaged programs, and finds that when the advisor is making the investment decisions, performance falls short. This raises the question whether clients should give advisors discretion to manage their portfolios.
Source: 401khelpcenter.com, August 2012
Summary: Two-thirds of Americans with defined contribution (DC) plans or IRAs admit to spending less than five minutes examining their retirement plan disclosures - one in five say they rarely or never read the disclosure paperwork at all. Only 12 percent of plan participants said they could estimate the amount of fees and expenses they paid on their retirement plan account.
Source: 401khelpcenter.com, August 2012
Summary: A growing number of employers are providing their employees with 401k plan features to help drive positive plan participation and encourage savings, according to data released by Schwab Retirement Plan Services.
Source: 401khelpcenter.com, August 2012
Summary: This Diversified study, Advisor Practices of the Future 2012-2015, reveals how mandated fee disclosures and healthcare reform will fuel double-digit growth for advisors who work primarily or exclusively with retirement plans, as practices transition from regional to national and merger and acquisition activity increases.
Source: 401khelpcenter.com, August 2012
Summary: Transamerica Retirement Services announced the findings of the 2012 Gregory Group Plan Sponsor Survey, an annual study of retirement plan sponsors that identifies performance improvement opportunities for third party administrators (TPAs) of 401k plans.
Source: 401khelpcenter.com, August 2012
Summary: Cerulli's latest research study on the large and mega defined contribution plan marketplace includes in-depth analysis of the state of custom target-date funds within these plans, and includes projections for these assets to reach $218 billion by 2016, a 22% increase from the 2011 asset level of $46.4 billion.
Source: 401khelpcenter.com, August 2012
Summary: As reported in Barlow Research's Economic Pulse Survey for the 3rd quarter of 2012, 43% of owners of small businesses with sales $100,000 to $10 million do not intend to retire and of those who do intend to retire, the average age is now approximately 67 years old.
Source: 401khelpcenter.com, August 2012
Summary: Global ETF assets under management have doubled in the last five years, as has the number of products available. While growth in the more mature ETF markets is likely to slow in the medium term, new products will continue to be added to an increasingly diverse and sophisticated ETF line-up.
Source: 401khelpcenter.com, August 2012
Summary: In this white paper, author argues the new service provider fee disclosures give retirement plans a valuable tool to match fee structure and service provider relationships to industry best practices while benchmarking fees to determine reasonableness. The paper also describes a methodical five-step approach retirement plan committees can follow and mitigate fiduciary risk.
Source: 401khelpcenter.com, August 2012
Summary: Fidelity Investments announced that employee and employer 401k contributions continued to increase during the second quarter, compared to the same period in recent years.
Source: 401khelpcenter.com, August 2012
Summary: BrightScope together with Target-Date Analytics announced the release of Popping the Hood V, a 200+ page report containing four pages of data on each of the fund families. This study provides a detailed analysis of target-date funds and fund families.
Source: 401khelpcenter.com, July 2012
Summary: According to a new analysis from the Principal Financial Group, employees who attend personalized, one-on-one sessions at the worksite take more positive actions including participating more and saving more.
Source: 401khelpcenter.com, July 2012
Summary: There is new hope that Americans will be better prepared for retirement, thanks to automatic features offered through employer-sponsored retirement plans, according to a study just released from Lincoln Financial Group and Retirement Made Simpler.
Source: 401khelpcenter.com, July 2012
Summary: The Defined Contribution Investment-Only (DCIO) market is set to grow to 60% of total DC plan assets by 2017, up from an estimated 52% at year-end 2011, according to a new report from Strategic Insight.
Source: 401khelpcenter.com, July 2012
Summary: Diversified announced the availability of 10-Minute Enrollment: Scaling Back Meeting Content to Drive Higher Enrollment Rates, a new white paper that focuses on how simplifying the retirement savings plan enrollment process can help increase participation rates.
Source: 401khelpcenter.com, July 2012
Summary: Bank of America Merrill Lynch today announced findings from its 2012 Workplace Benefits Report, an annual study of the increasingly significant role financial benefit plans play in employers' talent management strategies and in the overall financial wellness of their employees. The scope of the research was expanded this year to examine both employer and employee perspectives on the evolution, availability and usefulness of workplace benefits.
Source: 401khelpcenter.com, June 2012
Summary: Stronger market returns and continued retirement savings behaviors by employees over the past few years have helped U.S. workers make progress in closing the gap between the amount of money they need to meet their financial needs in retirement and what they are on track to accumulate, according to two new research reports by Aon Hewitt.
Source: 401khelpcenter.com, June 2012
Summary: Paper urges plan sponsors to spend time reviewing their plan's design before developing new communication or education materials to ensure all features support the key objectives. It also offers guidance on maximizing every opportunity to shape participant behavior to help employees save for a well-funded retirement.
Source: 401khelpcenter.com, June 2012
Summary: One in three investors (33%) say low interest rates will cause them to "delay" retirement. Forty-five percent of non-retired Americans and 34% of retirees fear that current low interest rates may cause them to "outlive" their money in retirement. This is according to the latest Wells Fargo/Gallup Investor and Retirement Optimism Index.
Source: 401khelpcenter.com, June 2012
Summary: Protecting against risk is the most important concern for Americans of every age when it comes to managing their retirement assets, according to Charles Schwab's latest quarterly Retirement Pulse Survey.
Source: 401khelpcenter.com, May 2012
Summary: MassMutual's Retirement Services Division data for the first quarter 2012 indicates that two segments of its defined contribution plan participants are increasing their savings levels at a higher rate than participants overall. For the quarter ended March 31, 2012, women increased their deferral rates at twice the level of men (4 basis point average increase for women vs. 2 basis point average increase for men).
Source: 401khelpcenter.com, May 2012
Summary: Employers and their employees hold different perspectives on how to best achieve retirement preparedness through 401k plans, according to the results of two newly released studies from Schwab Retirement Plan Services. Taken together, the studies indicate that, despite efforts by employers to educate workers on the 401k offering, most workers are unengaged and financially unprepared for retirement.
Source: 401khelpcenter.com, May 2012
Summary: When it comes to enjoying life in retirement, the reality for current retirees is beating the expectations of current workers, according to a new survey released today by BlackRock. At the same time, the poll shows, long-term participation in a workplace retirement savings plan like a 401k is also emerging as a key boost to well-being in retired life as well as effective retirement planning among current workers.
Source: 401khelpcenter.com, May 2012
Summary: ING U.S. released key findings from a study commissioned by the ING Retirement Research Institute that sheds light on the distinct realities women encounter when saving and preparing for retirement. The study, Retirement Revealed, underscores that women on average are significantly less prepared for retirement than men.
Source: 401khelpcenter.com, May 2012
Summary: New Vanguard research, a second report in a series on diversity and retirement savings, indicates that blacks and Hispanics are more likely to take loans and hardship withdrawals from their 401k plan accounts than whites and Asians. At the same time, blacks and Hispanics borrow only slightly more of their retirement account balance, so members of all four groups put roughly the same amount of their assets at risk by borrowing from their retirement plan.
Source: 401khelpcenter.com, May 2012
Summary: New research from T. Rowe Price shows that most investors (69%) between the ages of 21-50 plan to work either part-time or full-time during their retirement years. Among those who plan to work at least part-time, most (75%) will do so because they want to stay active and involved; only 23% believe they will do so because they will not have saved enough money.
Source: 401khelpcenter.com, April 2012
