Free Weekly 401k eNewsletter

Click for EmployeeBenefitsJobs.com

Got News

Insights: Research and White Papers

    
Lump Sum Distributions From Pension Plans: Recent Evidence and Issues for Policy and Research

Summary: Examines preretirement lump sum distributions from pension plans, which have grown significantly in recent years. Most LSD recipients do not roll over the funds into qualified accounts, but the likelihood of rollover rises for larger distributions. This paper considers the role of one aspect of pension policy -- the tax treatment of lump sum distributions that are taken from pension balances before a worker reaches retirement age.

Source: Ssrn.com, July 2014

NAGDCA Report on Target-Date Funds

Summary: This 17 page publication reviews the current state of TDFs, pointing out trends in usage and changes in the types of funds available. It also suggest some tools that can help plan sponsors in evaluating the characteristics of TDFs and some tips on selecting an appropriate fund series for your specific plan.

Source: Nagdca.org , July 2014

Measuring Employee Savings and Investing Behavior in DC Plans

Summary: This Aon Hewitt research report analyzes the participant behavior of more than 3.5 million employees eligible for defined contribution plans offered by their employers. The data can be used to provide a comprehensive view of the defined contribution universe including participation rates, savings levels, plan balances, investment actions and account activity. This is a nine page highlight report.

Source: Aon.com , July 2014

The Largest 401k Plan 'Leakage' Culprit: Job Change Cashouts

Summary: In general, plan cashouts at job change have a much more serious impact on retirement savings than either plan loan defaults or hardship withdrawals, even taking into account the impact of a six-month suspension of contributions that generally accompanies those hardship withdrawals, according to new analysis by the nonpartisan Employee Benefit Research Institute.

Source: Ebri.org , July 2014

Stock Market's Rise Lifts Retirement Balances to a New Record High

Summary: The recent record markets have resulted in increased retirement savings for millions of Americans according to a second quarter 2014 Fidelity analysis of its 401k and IRA accounts.

Source: 401khelpcenter.com, July 2014

Retirement Plan Participants in Favor of Automatic Annual Increase

Summary: Survey respondents ranked several financial priorities that compete with their retirement account contributions including: paying off debt (29 percent), day-to-day expenses (23 percent), taking care of family (11 percent) and saving for college (4 percent) among others. But 55% said they would favor automatic annual increases to their contributions.

Source: 401khelpcenter.com, July 2014

Pre-Retiree Study Shows Today's Priorities Trump Future Retirement Plans

Summary: The study, which consisted of responses from 1,619 full-time employed individuals between the ages of 25 and 65 who have been participating in their employer-sponsored retirement plan, looked at why participants delay saving for retirement and how those barriers can be overcome.

Source: 401khelpcenter.com, July 2014

Transamerica Releases Study on Savings Habits of American Millennials

Summary: The nonprofit Transamerica Center for Retirement Studies released a new report and fact sheet revealing the retirement savings habits of American Millennial workers (born between 1979 and 1996) from its 15th Annual Transamerica Retirement Survey, one of the largest and longest-running national surveys of its kind.

Source: 401khelpcenter.com, July 2014

Millennial Workers: An Emerging Generation of Super Savers

Summary: Millennial workers are an emerging generation of retirement super savers. Unlike their parents' generation, most expect their primary source of income in retirement to be self-funded through retirement accounts or other savings and investments. The good news is that they are getting an early start with their savings and are taking advantage of the latest innovations that their employer-sponsored retirement plans have to offer. Employers should take note: Two-thirds of Millennials say they would be likely to switch companies for a similar job if it comes with better retirement benefits.

Source: Transamericacenter.org , July 2014

Peeling Back the Fiduciary Layers and Unscrambling the Fiduciary Confusion

Summary: In seeking clarity about the "type" of 401k professional it has retained, plan sponsors often find the answers they are given to be incoherent with a slant in favor of the 401k industry instead of plan participants. The residual fuzziness plan sponsors are left feeling about this topic is a source of significant irritation to them. This comprehensive article attempts to peel back the fiduciary layers and unscrambling the fiduciary fuzziness.

Source: 401khelpcenter.com, July 2014

The Perils of a Non-ERISA 403(b) Plan

Summary: Non-ERISA 403(b) plans seem to be dropping in popularity among non-profit organizations. Given regulatory guidelines that can be difficult to follow, many plan sponsors are finding it harder to maintain a fully compliant non-ERISA plan. This article offers tips to help plan sponsors change their non-ERISA 403(b) plan to an ERISA plan and reviews compliance issues you need to consider to make this change.

Source: Strategicbenefitservices.com, July 2014

Infographic: Breakdown of Small Plan 401k Fees

Summary: Here is a great Infographic from the 401k Averages Book offering a breakdown of small 401k retirement plan fees.

Source: 401kfeedisclosure.com, July 2014

New Analysis of 401k Plan Performance and Fees

Summary: In the paper "Beyond Diversification: The Pervasive Problem of Excessive Fees and 'Dominated Funds' in 401k Plans," by Professors Ayres and Curtis, the authors conclude that 401k plan participants suffer significant losses from (1) sponsor-fiduciary fund menu construction decisions, (2) participant asset allocation mistakes and (3) high fees on plan investment options. This article we review their paper in detail.

Source: Octoberthree.com, July 2014

Essentials of Target-Date Design and Analysis

Summary: This white paper provides a summary and analysis of essential factors that should be considered regarding target-date design and analysis, including: Risk in the target-date fund space; Active versus passive manager selection; and, Closed versus open-architecture approaches.

Source: Americancentury.com , July 2014

Designing a 'Best Practices' Participant Directed Retirement Plan Investment Menu

Summary: Designing an industry "best practices" investment menu for a participant directed retirement plan requires a lot more thought than merely filling the Morningstar style boxes and calling it a day. Experience has shown that participants often frustrate the best intentioned expert who tries to build these investment line-ups. Understanding Behavioral Finance is key to overcoming many of the obstacles participants have when interacting with their plan's investment menu.

Source: Francisinvco.com, July 2014

Canadians Now Invest 14% of Their Income

Summary: Rising stock markets are boosting investor confidence and leading Canadians to increase the share of income they invest, according to the latest TD Investor Insights Index. The annual survey finds that more than half of Canadian investors saw their investments improve over the past 12 months, and nearly as many expect continued gains in the year ahead.

Source: Benefitscanada.com, July 2014

Managing Financial Risk in Retirement and Benefits Programs

Summary: This 2014 survey focuses on finance executives' increasing interest in pension de-risking strategies, explores the different options that companies are considering to enhance defined contribution plans, and reflects on how to achieve a better balance between retirement benefits and other employee benefit offerings. Twenty pages.

Source: Prudential.com , July 2014

Worldwide Mutual Fund Assets Top $30 Trillion

Summary: Mutual fund assets worldwide increased 2.7 percent to $30.84 trillion, an all-time high, at the end of the first quarter of 2014. The Investment Company Institute compiles worldwide statistics on behalf of the International Investment Funds Association, an organization of national mutual fund associations. The collection for the first quarter of 2014 contains statistics from 45 countries.

Source: Ici.org, July 2014

Financial Knowledge and 401k Investment Performance

Summary: Financial knowledge is critical to ones retirement security, finds a new study showing that 401k plan participants who scored higher on a test of their financial knowledge earned an additional 1.3 percentage points of investment returns annually on their retirement accounts.

Source: Nber.org, July 2014

Cash Balance Retirement Plans Grow 22% While 401k Market Remains Flat

Summary: Kravitz released the 2014 National Cash Balance Research Report, showing a 22% increase in new plans for the most recent year. The number of new Cash Balance Plans continues to grow faster than all other sectors of the retirement plan market, including 401k plans, which increased just 1% despite continuing economic recovery.

Source: 401khelpcenter.com, July 2014

A Visual History of ERISA

Summary: Over the past 40 years, ERISA has undergone more than 50 major and technical alterations and updates. And you thought your life was complicated. This infographic presents a visual history of ERISA.

Source: Shoefitts.com, June 2014

Perspectives on Custom Target-Date Strategies in DC Plans

Summary: Target-date fund strategies have grown rapidly in defined contribution plans over the last decade, with low-cost passive options attracting an increasing share of new mandates. There’s also been a growing interest in the merits of plan-specific or customized target-date programs. Driving this interest has been fiduciaries' interest in having the TDF strategy more closely reflect their unique investment beliefs; a desire for a customized glide path, based on participant characteristics; and a preference for direct control over plan investment strategy.

Source: Vanguard.com , June 2014

2014 Employee Benefits Research Report

Summary: SHRM's 2014 Employee Benefits research report provides comprehensive information about the types of benefits U.S. employers offer to their employees. In 2014, more than 300 benefits were explored. The report also examines trends in employee benefits offerings over the last five years.

Source: Shrm.org, June 2014

Competition Among DC Investment Managers Gets Hotter

Summary: Defined contribution plan sponsors across all plan size segments are expanding their 401k plan investment menus -- not by adding new investment options, but by increasing the number of investment managers they use. While this trend signals an upsurge in competition for DC investment managers, it also points to opportunity for DC investment-only firms that don't offer their own recordkeeping platforms.

Source: 401khelpcenter.com, June 2014

Why Workers' Retirement Income Security Prospects Look So Bleak: A Review of Recent Assessments

Summary: Several recent assessments suggest that the majority of U.S. workers are at risk of having inadequate resources to maintain their work-life standards of living in retirement. These assessments are often based on models that fail to reflect patterns of income, consumption and savings that vary over workers' life cycles. Although clearly some workers are not saving sufficiently to maintain their standards of living throughout retirement, the situation is less dire than a number of studies have suggested.

Source: Ssrn.com, June 2014

Vanguard: 52% of Small Business 401k Participants Have Plan Investments Professionally Managed

Summary: More than three-quarters of small businesses employees who participate in their firm's 401k plan have well-constructed, appropriately diversified investment portfolios, in many cases because their employer placed them in a professionally managed investment option, Vanguard researchers said.

Source: 401khelpcenter.com, June 2014

Over 57,000 401k Plans Failed Nondiscrimination Testing

Summary: Judy Diamond Associates released a study revealing that 57,277 401k plans failed their most recent IRS nondiscrimination tests. These plans were required to return $794 million in 401k contributions to highly compensated employees, resulting in increased income taxes and lower retirement savings for the impacted participants.

Source: 401khelpcenter.com, June 2014

BrightScope Reveals Latest Trends in Target-Date Funds

Summary: BrightScope announced recent trends in target-date funds as a result of its examination of the lowest cost institutional share class for all target-date funds through December 2013. This includes 52 target-date series, composed of 479 distinct target-date funds from 39 different asset managers.

Source: 401khelpcenter.com, June 2014

2014 Planning and Progress Study: Retirement Redefined

Summary: Significant differences exist between the attitudes and expectations of Americans who are currently working vs. those already retired, according to the most recent findings from Northwestern Mutual's 2014 Planning and Progress Study. Most notably, the research suggests that substantial changes in retirement age and lifestyle are on the horizon. This is a 16 page summary.

Source: Northwesternmutual.com , June 2014

The Impact of "Leakage" on 401k Accumulations

Summary: Would restricting preretirement withdrawals from 401k plans help or hurt retirement savings in America? New analysis conducted by the nonpartisan Employee Benefit Research Institute for the ERISA Advisory Council finds that "leakage" -- preretirement access to 401k plan savings by workers, either through loans, hardship withdrawals, or payout at job change -- can have a negative impact on 401k accumulations (defined as 401k account balances plus IRA rollovers originating in 401k plans) at age 65.

Source: Ebri.org , June 2014

Vanguard Small Business Retirement Plan Report

Summary: This 27 page report is designed to help small-business DC plan sponsors understand how their plans compare with other small-business plans. The report information should help small-businesses make more effective plan decisions and serve as a valuable reference tool.

Source: Vanguard.com, June 2014

Preparing for a Department of Labor Audit: A White Paper for Qualified Plan Sponsors

Summary: The DOL wants all qualified plans to be in compliance with ERISA laws and for the plan participants’ assets to be protected. It is important to take an audit very seriously. This paper discusses why plans are audited, what information is requested, how to prepare for the DOL interview, and other important points.

Source: Belr.com, June 2014

Borrowing Against Your Future - Survey of DC Plan Loans

Summary: This is a five page Executive Summary of a just released study by TIAA-CREF on participant loan activity. It was conducted by an independent research firm and polled a random sample of more than 1,000 adults nationwide on their retirement plans.

Source: Tiaa-cref.org , June 2014

Collective Investment Funds Most Used in Larger DC Plans

Summary: Research with leading defined contribution investment-only managers indicates that CTFs are viable conduits to winning DC business, with almost half of asset managers finding that plan sponsors with more than $250 million are amenable to them.

Source: 401khelpcenter.com, June 2014

Forty-Four Percent of Those Who Take a Plan Loan Regret Decision

Summary: A new study by TIAA-CREF shows that nearly one-third (29 percent) of Americans who participate in a retirement plan say they have taken out a loan from the savings in their plan. Yet 44 percent of those who have borrowed against their retirement plan savings regret the decision. Among those who took out a loan, 43 percent have taken out two or more loans.

Source: 401khelpcenter.com, June 2014

Plan Sponsors Shift Toward Simplicity Over Flexibility and Choice

Summary: Simplicity surpasses flexibility and choice as the leading philosophy behind retirement plan design, according to the 2014 MetLife Qualified Retirement Plan Barometer. An overwhelming majority, 89%, of companies that offer broad access to defined benefit (DB) and defined contribution (DC) plans and 77% of DC-only plan sponsors say "keep it simple and avoid over-complication," when it comes to retirement plan design.

Source: 401khelpcenter.com, June 2014

A Study of Retirement Income Culture Among the Fortune 1000

Summary: MetLife developed the Qualified Retirement Plan Barometer study, first released in 2011, as a benchmark for assessing, at a point in time, whether, and to what extent, Fortune 1000 companies were creating a retirement income culture within their respective organizations -- one that includes emphasis on both retirement savings and retirement income. This just released 28 page document is the 2014 version.

Source: Metlife.com , June 2014

Seven Reasons for Hiring a Dedicated Retirement Plan Advisor

Summary: Fiduciaries of employer-sponsored retirement plans hire a Retirement Plan Advisor to meet their responsibilities under ERISA and to improve the probability that their employees’ retirement investment goals will be achieved. The Plan Advisor creates a custom set of processes and prudent practices for its clients, delivered through at least seven major functions outlined here.

Source: Strategicbenefitservices.com, June 2014

Who's Most Likely to Come up Short in Retirement, and When?

Summary: ill Baby Boomers and Gen Xers have enough money to live on when they retire, and if not, when will they run short? New modeling by the nonpartisan EBRI finds that those in the lowest-income brackets are most likely to run short, many in the first year of retirement.

Source: Ebri.org , June 2014

Comprehensive Report on Vanguard's 2013 Defined Contribution Plan Data

Summary: The main concerns affecting retirement savings plans remain largely the same -- improving plan participation and contribution rates and enhancing portfolio diversification -- although increasingly these changes are occurring through plan and investment menu design decisions made by sponsors, rather than by participants' own decisions. This is a 99 page comprehensive analysis of DC plans and participant behavior based on 2013 Vanguard recordkeeping data.

Source: Vanguard.com , June 2014

The Evolution of Company Stock in DC Plans

Summary: Company stock has historically played an important role within certain DC plans in the United States, particularly those sponsored by large firms. This report begins with an overview of factors unique to company stock in DC plans. Next it provide an overview of the characteristics of plans sponsors actively offering company stock and the nature of company stock restrictions. Then the report considers two simple regression models, incorporating both participant demographics and plan design features, to examine holdings of company stock. Finally, report concludes with a discussion of findings and with implications for plan sponsors.

Source: Vanguard.com , June 2014

401k Plan Auto Enrollment Paying Off, Vanguard

Summary: Among 401k plans automatically enrolling employees, 69% now also automatically increase their contribution rate annually and invest their assets in a balanced investment option, setting up a growing number of employees -- especially low-income, young, and minority workers -- for healthier retirement savings, Vanguard researchers said.

Source: 401khelpcenter.com, June 2014

Survey: Sponsors Focus on Simplifying Investment Lineups for Participants

Summary: At a time when plan sponsors are dedicated to improving participation rates, a high number of investment options can have the opposite impact. As plan sponsors look to create more efficient and simplified lineups, a variety of options will be considered. Within the next year and a half, some of these changes will take place as a significant number of plan sponsors implement menu simplification strategies.

Source: Seic.com , June 2014

Study: Trustworthiness Key in Selecting Plan Provider

Summary: Among all of the factors that influence plan sponsors when selecting which plan provider to work with, trustworthiness ranks as the most important factor; scoring higher than factors such as, participant customer service, quality of the customer experience, technology, education, administrative service and pricing.

Source: 401khelpcenter.com, June 2014

Buyer Beware: Sponsors Should Read Details in Fiduciary Warranties

Summary: Employer-sponsored retirement plan fiduciaries should be cautious about signing fiduciary warranties, because some provide far less value than fiduciary insurance and can potentially be a "marketing gimmick."

Source: Bna.com, June 2014

Internal Controls for Retirement Plans

Summary: Good fundamental internal controls in the operation of retirement plans are the bedrock of fiduciary and compliance requirements. Retirement plan operations and internal controls are complicated, frequently ignored, and a potential source of significant compliance breaches. The fundamental tenants of good internal controls are segregation of duties, reporting & reconciliation, and oversight of outsourced administration functions. This paper will broadly discuss these fundamental tenants.

Source: Multnomahgroup.com, June 2014

Analysis Reveals Opportunity for Advisors Seeking 401k Rollovers

Summary: Judy Diamond Associates released an analysis of the retirement industry that revealed that approximately one-fifth of the assets held in large 401k plans are held by retirees or pre-retirees who have not yet rolled out of their plans. The research indicates that there is an enormous opportunity for financial advisors to assist works transitioning into new retirement plans.

Source: 401khelpcenter.com, June 2014

DC Plan Participants and Their Financial Situation

Summary: According to Spectrem Group's study, Attitudes of Retirement Plan Participants, only 60 percent of participants think their financial situation is improved over one year ago, and only 59 percent believe their financial situation will be stronger one year from now than at present. On the other hand, less than half of plan participants are pessimistic about their debt and savings situation.

Source: Spectrem.com, June 2014

How the Millennial Generation Is Transforming Employee Benefits

Summary: According to a number of recent studies, the millennial generation, today's incoming young adult employees, shows far more interest than older generations in a broad spectrum of employee benefits to protect them from various life risks. They are more cautious than boomers or Gen Xers in choosing their financial portfolios and more focused on planning for their long-term future.

Source: Iscebs.org , June 2014

Bracing for Massive 401k Outflows

Summary: Defined contribution plans will experience seismic outflows as baby boomers retire, creating opportunities, and real challenges, for advisors to plan sponsors. That's the upshot of new analysis from Cerulli Associates that projects distributions from 401k plans will outpace new contributions by 2016.

Source: Benefitspro.com, June 2014

Webinar Slides: The Return of Fixed Annuities in DC Retirement Plans

Summary: This PDF is the slides from a presentation covering the following agenda: What are fixed annuities in the context of defined contribution plans? How should plan sponsors evaluate the costs and benefits of annuities? What considerations should plan sponsors have in communicating those costs and benefits to participants? How do annuities and annuitization impact the accounting and audit aspects of plan management? What is on the horizon for annuities in retirement plans?

Source: Multnomahgroup.com , June 2014

Attracting and Keeping Employees: The Strategic Value of Employee Benefits

Summary: Attracting and retaining a talented, committed workforce is crucial for employers. This research shows that employees’ attitudes toward their health and retirement benefits are correlated with their employment choices, as well as with their levels of commitment and engagement. Employers that are able to target their benefit package to attract and keep the employees they need to succeed gain a valuable competitive advantage.

Source: Towerswatson.com , May 2014

No Rush to In-Plan Roth Conversions

Summary: Roth in-plan conversions aren't proving as popular as imagined. According to Vanguard, while 52 percent of its defined contribution plans offered Roth elective deferrals, just 8 percent of plans offered Roth in-plan conversions as of year-end 2013.

Source: Benefitspro.com, May 2014

Retirement Savings on the Rebound, Research Shows

Summary: 401k account balances have gone up 93 percent, nearly double since the economic downturn in 2009 according to the latest research from the Principal Financial Group. While much of the increase reflects a rebounding market, the study found a significant increase in participation and savings rates since the market collapse, with account balances rising 17 percent in 2013.

Source: 401khelpcenter.com, May 2014

The Changing Face of Retirement: The Aegon Retirement Readiness Survey 2014

Summary: The Aegon Retirement Readiness survey for 2014 is clearer than ever about people's ambitions and fears with respect to retirement. Now in its third year, conducted in collaboration with Transamerica Center for Retirement Studies, Aegon's global retirement survey covers 15 countries and contains findings based on online questionnaires conducted with 16,000 people who either work in paid employment or live in retirement.

Source: Transamericacenter.org , May 2014

Take It or Leave It? Factors Influencing a Retirement Plan Rollover

Summary: It is a question of increasing interest and concern to policymakers and employers alike: When workers leave or change jobs, what do they do with their employment-based retirement savings and why? New research from the nonpartisan Employee Benefit Research Institute finds that it largely depends on whether they retire or stay in the work force. However, the analysis also found that a number of other factors play a role in influencing the choice.

Source: Ebri.org , May 2014

Tiptoeing Through the Minefield: A Pension Plan Is a Scary Place

Summary: If you are administering a pension fund, there are probably hidden dangers of which you are not aware. The nature of pension plans is such that problems tend to remain hidden for years, often decades, before finally surfacing. These lurking dangers are often difficult to remedy after the passage of so much time, and may result in litigation. The best approach to avoiding this type of liability is really simple if you follow the two-step process outlined here.

Source: Buckconsultants.com , May 2014

Going Broke in Retirement Is Top Fear for Americans

Summary: Running out of money in retirement trumps other stress-inducing situations and pressures such as public speaking, gaining weight and going to the dentist for mass affluent Americans, according to the results of Bank of America's latest Merrill Edge Report. Despite the prospect of not having enough money to live on later in life, many are unwilling to cut spending on indulgences now in order to invest for retirement.

Source: 401khelpcenter.com, May 2014

Fidelity Finds Millions of Unengaged 401k Account Holders

Summary: There's more disquieting news today for the DIY crowd. Nearly two-thirds, 63 percent, of American workers choose the do-it-yourself approach to managing their retirement savings, but they aren't paying much attention to their accounts, according to a study by Fidelity Investments. A data analysis of 13 million participants in Fidelity Investments 401k plans across the country found that about half of them, 54 percent, are what Fidelity calls "unengaged."

Source: Benefitspro.com, May 2014

Asset Managers Should Prepare for Rise in DC Specialists

Summary: While the DC business remains largely the domain of large record-keeper/asset managers and investment consultants, asset managers who ignore the financial advisors serving smaller plans are missing an opportunity to remain competitive in the DC advisor market.

Source: 401khelpcenter.com, May 2014

"401k Geographic Trends" Analysis Reveals Top Cities for Retirement Investing

Summary: Fidelity Investments released analysis that shows which cities and its citizens are saving the most -- or least -- in their workplace retirement accounts, and which are more prone to having an outstanding 401k loan.

Source: 401khelpcenter.com, May 2014

Low Income: Why Only 12% Save to Retire

Summary: Retirement saving primarily takes place in workplace plans. But to participate in a plan, workers must clear four hurdles. First, they need a job. Next, their employer must offer a retirement savings plan. If there is a plan, they must be eligible to participate. And if eligible, they must sign up and contribute. A failure to sign up can't be blamed for the dismal savings rate of this low-income group. Instead, the problem is that many never get the chance.

Source: Squaredawayblog.bc.edu, May 2014

Average Expense Ratios for Equity Funds Declined in 2013, Continuing Downward Trend

Summary: The annual report on fees and expenses also shows that fund expense ratios often vary inversely with fund assets because of economies of scale. The report, "Trends in the Expenses and Fees of Mutual Funds, 2013," also shows that expense ratios of hybrid funds, bond funds, and target-date funds were largely unchanged in 2013, after declining significantly in the prior several years.

Source: Ici.org, May 2014

Reexamining "To Versus Through": What New Research Tells Us About an Old Debate

Summary: "To versus through" has become shorthand for whether a target-date fund glide path should evolve only until the target date or continue to reduce the risk level beyond the target date. This paper takes the position that a persuasive common sense case can be made for the "to fund" approach based on an understanding of human capital, or the ability to earn income, which is depleted at retirement, and retirement risk.

Source: Blackrock.com , May 2014

Study Finds Target-Date Funds Often Not Used as Intended, Negatively Impacting Returns

Summary: A new study from Financial Engines and Aon Hewitt reveals that 401k participants who get professional investment help in the form of managed accounts, target-date funds or online advice, earned higher median annual returns than those who go it alone. However, the study also found that many workers investing in target-date funds are not using them as intended, ultimately lowering their investment returns.

Source: 401khelpcenter.com, May 2014

Analysis Reveals States With Greatest Growth in New 401k Plans

Summary: For this study, Judy Diamond Associates looked at the number of newly initiated 401k plans, expressed as a percentage of all plans in that state. The study looked at the most recent year for which a complete set of data was available, 2012.

Source: 401khelpcenter.com, May 2014

Most IRAs Created Through Rollover Contributions

Summary: Traditional IRAs continue to be opened predominantly with rollovers from employer-sponsored retirement plans, according to a study released by the Investment Company Institute, The study shows that few Americans used the opportunity to contribute and save directly in IRAs in 2012.

Source: Wolterskluwerlb.com, May 2014

Affluent Investors Fear Catastrophic Event Could Derail Retirement Plans

Summary: According to a new survey of 500 affluent U.S. investors released today by Legg Mason, 88% are confident they will have enough money to live the lifestyle they want in retirement and 86% are confident in their ability to retire at the age they want. But that confidence doesn't outweigh their fears.

Source: 401khelpcenter.com, May 2014

Does Your Approach to Monitoring and Communicating Your Target-Date Funds Need Rethinking?

Summary: Although the use of TDFs has been blessed, the regulations require 401k fiduciaries to prudently select and then monitor the ones they choose. What should go into the selection and monitoring processes, however, is not spelled out in detail. This paper discusses these issues and provide suggestions for addressing them.

Source: Investmenthorizons.com , May 2014

Connecting With Young Participants

Summary: Corporate Insight recently polled 990 retirement plan participants to collect data on their online preferences, behavior, use of the mobile channel, levels of satisfaction and numerous demographic factors. In this whitepaper they share a small portion of the survey data collected from respondents under the age of 40 to gauge how effectively leading retirement plan providers are connecting with young participants.

Source: Corporateinsight.com, May 2014

Designing Balanced DC Menus: Considering Diversified Fixed Income Choices

Summary: Defined contribution plan sponsors face a dual challenge: They must offer investment options consistent with the goals and demographics of plan members. They also must consider how the menu's structure affects the way individuals select investments. Bond offerings must be evaluated individually and holistically to help participants build a well-structured portfolio that fully leverages fixed income's potential to preserve principal, generate income and boost diversification. But how many bond offerings should be on a plan's investment menu. The answer: It depends.

Source: Pimco.com , May 2014

IRI Report Outlines Retirement Security Challenges for Women

Summary: The Insured Retirement Institute released new research showing that few women across the Baby Boomer and Generation X cohorts are confident in achieving a financially secure retirement. The report found that many women are still facing financial challenges, which are impairing their retirement readiness and outlook.

Source: 401khelpcenter.com, May 2014

Most Do-It-Yourselfers Turn Out Not to be "Doers" at All, According to Guardian Study

Summary: Guardian announced new findings from its second annual Guardian Workplace Benefits Study that reveal while four in 10 employees identify themselves as DIYers (Do-It-Yourselfers) when it comes to making financial decisions, they are significantly falling behind their peers on prioritizing and meeting key financial objectives.

Source: 401khelpcenter.com, May 2014

The Rise of DC Plans and the Impact on Participants

Summary: Over nearly four decades, employer-sponsored retirement plans have experienced a dramatic transformation as defined contribution plans have become the preeminent retirement savings vehicle for most workers. The emergence of DC plans is a positive development for many participants.

Source: Vanguard.com, May 2014

More Workers Satisfied With Retirement Benefits, Survey Finds

Summary: More U.S. employees are satisfied with their company-sponsored retirement benefits now compared with five years ago, but satisfaction with health care benefits, especially the cost of medical benefits, has declined, according to a survey by global professional services company Towers Watson.

Source: 401khelpcenter.com, May 2014

Advisors and the 'Halo Effect' on Small Business 401k's

Summary: Financial advisors emit a "halo effect" on small businesses that rely on advisors to structure 401k plans. Small plan sponsors report better retirement plans across eight separate metrics, a new survey has found. The survey also underscores how much opportunity there is for financial advisors who want to pursue the small-plan market.

Source: Insurancenewsnet.com, May 2014

Big Retirement Savings Gains for Small Businesses

Summary: As another sign of growing economic health for small businesses, Fidelity's latest Small Business Retirement Savings Analysis reveals increases in average balances and contributions for the third consecutive year. According to the analysis, which looks at more than 200,000 small business accounts, the average balance in these plans increased 4 percent -- and average contributions increased 18 percent.

Source: 401khelpcenter.com, May 2014

Exploring the Retirement Consumption Puzzle

Summary: Retirement income research and financial planning tools generally assume that retiree expenditures, or consumption, increase annually by inflation during retirement. This assumption is counter to a growing body of empirical research that has noted actual retiree expenditures tend to decrease both upon, and during, retirement. This phenomenon has been named the "retirement consumption puzzle."

Source: Onefpa.org, May 2014

Building Retirement Security Through DC Plans

Summary: This paper discusses why employer-sponsored defined contribution plans and in dividual retirement accounts are such an important part of the U.S. retirement system. Discusses the numerous positive strides taken by many plan sponsors to increase participation, provide more diversified portfolios, and provide immediate eligibility to cater to a mobile workforce.

Source: Acli.com , May 2014

Automatic Enrollment, Escalation Features Feed 401k Success

Summary: More and more, companies which have integrated auto-enrollment and auto-escalation features into the retirement plan design are producing impressive participation and savings rates, more in line with the targets that will result in the kinds of 401k balances participants will need in retirement.

Source: Benefitnews.com, April 2014

Roth Usage in Defined Contribution Plans

Summary: Offering Roth accounts within a defined contribution plan has become increasingly common and, is expected soon to become the norm -- not the exception. According to Aon Hewitt's 2013 Trends & Experience in Defined Contribution Plans report, 50% of employers currently allow employees to make Roth contributions, an increase from just 11% in 2007. This paper explores participant use of these plans.

Source: Aon.com , April 2014

Analysis Reveals Major Differences in 401k Plan Performance Across Different Industries

Summary: Looking at the average plan scores for 401k plans in 20 different industry classifications, Judy Diamond Associates discovered a 38% difference in the average score between the top ranking industry group, Finance and Insurance, and the lowest ranking group, Accommodation and Food Services.

Source: 401khelpcenter.com, April 2014

More Employers Adding Roth Features to Expand Savings Options

Summary: As lawmakers debate legislative proposals that would expand the use of Roth features in 401k and other savings plans, an analysis from Aon Hewitt shows companies and workers are increasingly receptive to these features as a retirement savings vehicle. The analysis reveals more U.S. employers are adding Roth 401k features than ever before and participation is also on the rise.

Source: 401khelpcenter.com, April 2014

Workplace Retirement Plans Key to Successful Retirement

Summary: Guardian released the results of a comprehensive national survey showing wide-spread satisfaction among sponsors who offer qualified retirement plans in the small-plan market, particularly if they work with a financial professional. The survey also shows that opportunities for financial professionals abound in this sector because they are viewed as key to the successful selection, implementation and management of group retirement plans.

Source: 401khelpcenter.com, April 2014

Retirement Income Statements May Help Avert a Looming Crisis

Summary: Many employers recognize the challenges that an aging workforce brings and are looking for ways to encourage their employees to save more for retirement now. This article discusses one overlooked tool that employers can leverage more effectively: income statements for defined contribution retirement plans, such as 401k plans. Download the white paper here.

Source: Mercer.com, April 2014

Retirement Remains Americans' Top Financial Worry

Summary: A firm majority of Americans, 59%, are worried about not having enough money for retirement, surpassing eight other financial matters. A majority of Americans have reported being "very" or "moderately" worried about retirement savings every year since 2001, illustrating that saving for retirement disquiets Americans in both good and bad economic times.

Source: Gallup.com, April 2014

Canada: What Retirement Crisis?

Summary: There isn't a retirement income crisis in Canada, according to a study. The Fraser Institute study The Reality of Retirement Income in Canada finds that analysts, activists and politicians who advocate for expanding the Canada Pension Plan (CPP) base their arguments on several faulty assumptions, often overlooking all the resources available to Canadians in retirement.

Source: Benefitscanada.com, April 2014

ERISA Fee Disclosures: Best Practices for Fiduciaries

Summary: In response to intense public scrutiny and a series of lawsuits brought against plan sponsors and fiduciaries concerning the compensation paid to 401k service providers, the DOL created a three-part fee disclosure initiative aimed at greater transparency for the benefit of such plans and their participants. In addition to changes to Form 5500, Schedule C reporting, the DOL issued two final regulations: (1) a regulation on participant-level fee disclosure, and (2) a regulation on plan sponsor-level fee disclosure. It is now up to plan sponsors and participants to use the disclosure information obtained as a result of these initiatives in a manner that yields prudent and effective investment decisions.

Source: Erisa-Lawyers.com , April 2014

Recordkeeper Data Show Continued Commitment to Retirement Saving

Summary: ICI's latest study of retirement plan savers' actions, based on defined contribution plan recordkeeper data covering nearly 24 million DC plan participant accounts, shows Americans' continuing commitment to putting away money for retirement.

Source: 401khelpcenter.com, April 2014

Defined Contribution Plan Participants' Activities, 2013

Summary: Key Findings: Defined contribution plan withdrawal activity in 2013 remained low and was similar to the prior year's activity; the vast majority of DC plan participants continued contributing to their plans in 2013; most DC plan participants stayed the course with their asset allocations as stock values generally rose throughout the year; and, DC plan participants' loan activity remains elevated compared with five years ago.

Source: Ici.org , April 2014

GAO Report on Pension Tax Incentives

Summary: Over the 3-year span from 2009 through 2011, private-sector employers terminated about 106,000 DC and 9,000 DB plans. Thus, while tax incentives from increased contribution limits may have spurred new plan formation, other events--such as company consolidations and bankruptcies stemming from the recent recession--may have discouraged it.

Source: Gao.gov, April 2014

Principal Financial Well Being Index -- 1st Quarter 2014

Summary: Nearly half of workers (46 percent) feel stressed about their current financial situation, although stress seems to diminish with age and among those seeking help. Only a third (35 percent) of baby boomers report they feel stressed about finances compared to half of Gen Y workers (51 percent). Those working with a financial professional were much less likely to feel stressed about their finances (33 percent compared to 51 percent).

Source: Principal.com , April 2014

Retirement Security Tops List of Employee Concerns

Summary: Recent economic shocks have prompted American workers to rethink their long-term financial goals and security. Many of them are feeling the pinch of higher out-of-pocket health costs, stagnant wages, restructured retirement programs and lingering financial losses. So it's no surprise to find that workers have become more concerned about their retirement security. Despite their financial worries, many are increasingly willing to trade cash compensation for greater certainty and more generous health and retirement benefits.

Source: Towerswatson.com, April 2014

Why Asset Class Diversification Is Important

Summary: One of the most effective risk management tools available to investors is diversifi cation across multiple asset classes (e.g., stocks, bonds, and cash). A portfolio's distribution across various asset classes is referred to as the portfolio's asset allocation. Academic studies have shown that more than 90% of the variations in a portfolio's return can be attributed to the asset allocation decision.

Source: Manning-Napier.com , April 2014

Helpful Tips to Prepare for a Retirement Plan Audit

Summary: Knowing when and how to arrange for an audit of a plan's financial statements is an important responsibility for plan sponsors. While the rules governing audits may appear straightforward, there are important exceptions that can impact filings -- for example, the so-called "80-120 Rule."

Source: Leggmason.com , April 2014

Reasons for a Change in Retirement Age

Summary: Workers who report a change in their expected retirement age in 2014 most often cite the poor economy (25 percent), according to a new report from the nonpartisan Employee Benefit Research Institute. Other reasons cited included the inability to afford retirement (18 percent), a change in their employment situation (17 percent) and health care costs (12 percent).

Source: Ebri.org , April 2014

Rising Rates, Low Returns and High Volatility Worrying DC Consultants

Summary: Defined contribution plan consultants are concerned about rising rates, a low return environment and high volatility over the next three to five years, according to a survey by PIMCO. More than 70 percent of consultants surveyed said they are concerned or very concerned about each of these topics.

Source: Benefitspro.com, April 2014

Participant Preferences in Target-Date Funds: An Update

Summary: Summary results of survey conducted to determine the preferences of defined contribution plan participants, as opposed to those of sponsors and consultants, on the various investment features of target-date funds. The goal was to support plan sponsors in the target-date fund selection process by helping them align their choice with the preferences and attitudes of their plan populations.

Source: Inginvestment.com , April 2014

The Equitable Allocation of Revenue Sharing to Participants

Summary: Revenue sharing has become a hot issue. That includes the selection of mutual funds that pay revenue sharing, its use for paying plan expenses, and the allocation of revenue sharing to participants. The focus on those issues is largely due to class action lawsuits against large plans and the insistence of the DOL on revenue sharing disclosure. This article discusses the legal issues and alternatives for allocating revenue sharing in participant-directed plans.

Source: Napa-Net.org , April 2014

Lessons From Top-Ranked Retirement Systems

Summary: Like a smooth-running watch, Switzerland's retirement system is keeping pace with retirees' expectations and needs, suggests the 2014 Global Retirement Index. The Swiss system ranked number one in the survey by Natixis Global Asset Management, which examined 20 factors in four subcategories in retirement: health, material wellbeing, quality of life and finances.

Source: Plansponsor.com, April 2014

Target-Date Funds Continue to Draw Assets in Retirement Plans

Summary: Defined Contribution plan participants reduced their holdings in fixed income and increased allocations to U.S. small-cap and mid-cap equities in 2013, while target-date funds continued their steady climb as a top asset class, according to the second annual edition of Northern Trust's Defined Contribution Tracker.

Source: Northerntrust.com, April 2014

Target-Date funds: Looking Beyond the Glide Path

Summary: A target-date fund's glide path, or how its asset allocation changes over time, is critical to helping shape outcomes for TDF investors, which in turn makes the TDF glide path an important aspect for plan sponsors to focus on in conducting due diligence. In this paper, authors explore key factors that go beyond the construction of TDF glide paths.

Source: Vanguard.com , April 2014

ERISA Fidelity Bond and Fiduciary Liability Insurance: What's Required and What's Prudent?

Summary: If you are a fiduciary with respect to your company retirement plan, you are personally liable for any losses incurred by the plan due to a fiduciary breach. Consider the dollar value of assets in your plan and the degree of your personal liability. How do you protect yourself, as well as the plan participants, from losses due to fraud or dishonesty?

Source: Aktrps.com , April 2014

Fiduciary Handbook for Understanding and Selecting Target-Date Funds

Summary: Target-date funds are a good idea that could become a great idea. This book on understanding and selecting target-date funds is written primarily for pension consultants. It contains 51 pages in ten chapters. Each chapter has three sections: a statement of facts, legal guidance, and an ethical perspective.

Source: Targetdatesolutions.com , April 2014

Investing for Retirement: The Defined Contribution Challenge

Summary: This white paper introduces a framework based on a common-sense definition of risk: not having enough wealth in retirement. Viewing risk this way leads to highly customizable solutions. Paper shows that dynamic asset allocation -- moving your assets -- is an essential part of achieving retirement goals. This paper is divided into two parts. Part I frames the question and explain how our framework leads to flexible, customizable solutions. Part II demonstrates the importance of dynamic allocation.

Source: Gmo.com , April 2014

Creating Results With Benefits Communication -- Frequently Asked Questions

Summary: It is more important than ever that employers not only provide programs that support employees' health and financial security, but also invest in educating people and supporting them to make good decisions. Benefits account for almost 30% of total compensation spending. An effective communication program helps your company make the most of its investment.

Source: Benzcommunications.com , April 2014

Retirement Assets Reach Record High

Summary: Following a very strong equity market in 2013, retirement assets at year-end were the highest on record. Total retirement assets grew to $16.642 trillion in 2013 compared to $16.3 trillion at year-end 2012, according to the Retirement Market Insights Report 2014 by Spectrem Group.

Source: 401khelpcenter.com, April 2014

401k Scorecard Finds Employees and Employers Taking Action

Summary: According to the latest Bank of America Merrill Lynch 401k Wellness Scorecard, throughout 2013 employees demonstrated positive savings behaviors in their 401k plan. The report reveals 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: 401khelpcenter.com, April 2014

Study Reveals Previously Unpublicized Conflict of Interest Can Harm Mutual Fund Performance

Summary: What is this heretofore ignored conflict-of-interest. FiduciaryNews spoke with Ashish Tiwari about it. Tiwari, Associate Professor of Finance and Tippie Research Fellow, University of Iowa, identifies this culprit as "cross trading." He and his co-author published a study that formally provides evidence on the magnitude of the performance penalty imposed by the potential conflicts of interest related to cross trades.

Source: Fiduciarynews.com, April 2014

Active vs. Passive Investment Management Marketing Practices

Summary: The issue of active versus passive management is a perennial debate for asset managers and investors. This white paper examines how three firms (American Funds, MFS and Vanguard) promote their services in the active and passive management spheres. The whitepaper compares the firms' marketing strengths and weaknesses and places a special emphasis on online thought leadership, examining the value, volume and website placement of the pieces the firms produce.

Source: Corporateinsight.com , April 2014

Participation Rate in 401k Plans Greater for Men Than Women

Summary: Wells Fargo announced key trends among the 4 million eligible employees for whom the firm provided an employer-sponsored 401k plan in 2013. Among the findings, when compared to Wells Fargo's recommended contribution index, which measures how many people are saving a minimum target of 10% in their 401k plan, including employer match, 43% of men contribute at this rate versus 39% of women.

Source: 401khelpcenter.com, April 2014

 


Press Center | Glossary | Privacy Policy | Terms of Use | Contact Us

Creative Commons License
This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.