401khelpcenter.com Logo

Insights: Research and White Papers

    
More Workers Plan to Postpone Retirement, If They Can

Summary: Offsetting expectations of an impending retirement tsunami as U.S. Baby Boomers leave the workforce, the age at which workers expect to retire has been steadily rising. In 1991, just 11 percent of workers expected to retire after age 65. Twenty-four years later, in 2015, 36 percent of workers report that they expect to retire after age 65, and 10 percent don’t plan to retire at all, according to the 2015 Retirement Confidence Survey.

Source: Shrm.org, April 2015

Custom TDFs: When to Use Them and Why

Summary: Custom TDFs are starting to become popular in larger DC plans. But do they make sense for plans with less than $1 billion? According to a report by consultants at Rocaton, the answer is yes, but only in certain circumstances.

Source: Napa-net.org, April 2015

Data May Show a Decrease in New 401k Plans

Summary: Judy Diamond Associates has completed an analysis of new 401k plans launched in 2013, the most recent year for which data is available, and discovered that substantially fewer new plans launched in 2013 than in 2012 possibly meaning fewer people are starting businesses or new businesses find 401k plans a luxury they cannot afford.

Source: 401khelpcenter.com, April 2015

Boomer Expectations for Retirement 2015

Summary: Each year the Insured Retirement Institute (IRI) conducts a survey to measure the retirement preparedness of the Boomer generation. This report, the fifth in the series, summarizes the results of the 2015 survey and analyzes key changes over the past five years.

Source: Myirionline.org , April 2015

Boomers' Confidence in Secure Retirement Sinks to Five-Year Low

Summary: The Insured Retirement Institute released a new research report that found Baby Boomers' confidence in having sufficient savings to last throughout retirement has dropped to a five-year low. Declining each year since 2011, the first year this study was conducted, the report found only 27 percent of Boomers are highly confident their savings will last.

Source: 401khelpcenter.com, April 2015

Plan Sponsors Eyeing New Set of DC Investment Providers

Summary: As defined contribution (DC) plan sponsors continue to refine their investment lineups, there is a sizable shake-up among the top 10 DC investment managers plan sponsors think of when considering a change to their lineups.

Source: 401khelpcenter.com, April 2015

403(b) vs. 401k: What Are the differences?

Summary: 403(b) plans are generally subject to fewer technical requirements and less administrative burdens than 401k plans. This two page chart compares 403(b) and 401k plan types in a columnar format.

Source: Consultrms.com , April 2015

SIMPLE IRAs vs. Safe Harbor 401k Plans: What Are the differences?

Summary: Savings Incentive Match Plans for Employees (SIMPLE's) are frequently mentioned as a low cost alternative to 401k Safe Harbor Plans for providing employees the opportunity to save for retirement. This chart compares the differences between SIMPLE IRAs and Safe Harbor 401k Plans.

Source: Consultrms.com , April 2015

Benefits of Collective Investment Trusts

Summary: Why do consultants, advisers and plan fiduciaries select CITs? This one page overview explores some of the benefits that make these investment funds increasingly popular in the retirement marketplace.

Source: Ctfcoalition.com , April 2015

Automated Investment Services: Are DC Plan Participants Better Off Using These Services?

Summary: This study delves deep to analyze the investment returns of do-it-yourself retirement plan investors vs. those using an automated investment allocation service. Key highlights: 1) The median return for participants using an automated investment allocation service was approximately 11.7% higher than the median return for participants using a DIY approach. 2) Automated investment allocation may decrease the likelihood of low or negative returns.

Source: Trsretirementservices.com , April 2015

Target-Date Fund Adoption in 2014

Summary: In 2014, the use of target-date funds in DC plans continued to grow rapidly. At the end of last year, 88% of plans offered a TDF, 64% of all participants were invested in the funds, and the funds accounted for 41% of total plan contributions. In this eight page paper you'll get the latest statistics on TDFs.

Source: Vanguard.com , April 2015

CIT Myths and Facts

Summary: Collective Investment Trusts (CITs) can be a valuable tool in developing a retirement plan lineup once the facts are distinguished from the myths. Here are several common myths about CITs, along with the related factual information.

Source: Ctfcoalition.com , April 2015

Overview of Collective Investment Trusts

Summary: As part of its CIT Awareness Week, the Coalition of Collective Investment Trusts released this 15 page white paper that provides a look at the history of collective investment trusts, an understanding of how the funds operate, their structure, and when they might be appropriate investment vehicles for eligible retirement plans.

Source: Ctfcoalition.com , March 2015

Study Profiles the Attributes of "Role Models" for Financial Preparedness

Summary: Voya's study found that out of three categories, both Workers and Retirees score highest on knowledge, but lowest in planning. Fewer than one-in-five Workers (17%) and only about one-quarter of Retirees (26%) had a written financial plan, while roughly one-third of Workers (31%) and Retirees (35%) had a comprehensive budget. The study also reveals gaps in retirement income planning.

Source: 401khelpcenter.com, March 2015

Paper Shares Insights for Alternative Fund Managers Looking to DC Plans

Summary: This paper explores: Elements of an attractive DC plan-focused alternative offering; How fund managers can address common reservations among plan advisors and fiduciaries; What DC plan advisors should consider communicating to DC plan fiduciaries; and, Critical evaluations for DC plans to make when considering alternative investments.

Source: 401khelpcenter.com, March 2015

How Much Needs to Be Saved for Retirement After Factoring In Post-Retirement Risks

Summary: This paper helps answer one of the most important questions that many defined contribution participant's face before retirement: How much do I need to save each year for a "successful" retirement? It includes three of the major post-retirement risks (longevity, investment, and long-term care).

Source: Ebri.org , March 2015

Defined Contribution Retirement Plan Benchmarks

Summary: This 36 page paper catalogues a summary of statistics and trends related to common features of retirement plans. The information and benchmarks included provide a useful comparison for evaluating the current status of your retirement plan program and may help you identify potential changes to consider, including automatic features that make saving easy for employees.

Source: Bmogamviewpoints.com , March 2015

Study Finds Hispanics Optimistic About Financial Future, Despite Challenges

Summary: Hispanics are feeling positive about their financial situation, according to new research commissioned by MassMutual, despite the slow growth in wages and still rebounding economy. The study examined the perceptions Hispanics have of their finances today as compared to the past, and how prepared they are for emergencies.

Source: 401khelpcenter.com, March 2015

DC Plan Participants Need More Than Just Retirement Advice

Summary: Employers, take note. Your employees are stressed and distracted by their finances, and it's affecting their jobs. According to the March 2015 State Street Global Advisors Biannual DC Investor Survey report, more than 3 in 5 defined contribution plan participants experience a moderate to high level of financial stress.

Source: Thinkadvisor.com, March 2015

30 Most Generous Companies With the Best 401k Plans

Summary: BrightScope announced the second annual list of the 30 Most Generous Companies ranked by their 401k plans, showcasing companies that are placing an emphasis on helping employees prepare for their financial futures.

Source: 401khelpcenter.com, March 2015

Understanding the Conservative Options for DC Plans

Summary: This six page paper, produced by Fidelity Investments, reviews the conservative options available to DC plans, discuss the potential advantages/disadvantages of each type of fund offering, and highlight the investment and plan considerations associated with them.

Source: Fidelity.com , March 2015

Nine Hot Trends for DC Retirement Plan Sponsors

Summary: Looking back on the defined contribution industry and the U.S. retirement system in 2014, article has highlighted nine trends that plan sponsors, committee members and plan participants can expect in 2015.

Source: Cammackretirement.com , March 2015

Survey Finds Most Employees Stressed and Distracted by Financial Worries

Summary: State Street Global Advisors released the findings of its semi-annual employee retirement survey, which targeted approximately 1,000 employees between the ages of 20 and 69. Overall, the survey found that the stressors having greatest impact to workers include student loans and mortgages, health care costs and an unsettled feeling that one has not done enough to prepare for retirement.

Source: 401khelpcenter.com, March 2015

Retirement Plan Assets Grow

Summary: According to Spectrem report, the total assets held in employer-sponsored retirement plans were $11.3 trillion at the end of 2014.

Source: Spectrem.com, March 2015

Picking Winners? Investment Consultants' Recommendations of Fund Managers

Summary: Investment consultants advise institutional investors on their choice of fund manager. Focusing on U.S. actively managed equity funds, paper analyzes the factors that drive consultant recommendations, what impact these recommendations have on flows, and how well the recommended funds perform.

Source: Ssrn.com, March 2015

Eight Trends for Retirement Plan Sponsors

Summary: According to Invesco, eight trends materialized during 2014 that it says will be hot for retirement plan sponsors in 2015. Article reviews what they say you should be watching for.

Source: Benefitspro.com, March 2015

Are Retirees Falling Short? Reconciling the Conflicting Evidence

Summary: A fundamental question for retirement security is whether today's working-age households will have adequate income to maintain their pre-retirement standard of living. Existing studies offer conflicting assessments. This paper addresses why the different approaches yield such different answers.

Source: Bc.edu, March 2015

Retirement Planning Among Middle-Aged and Older Hispanics

Summary: The goal of this study is to deepen the understanding of how middle age and older Hispanics plan for retirement. It finds that most participants, whether they were already retired or not, are not well prepared for retirement since they have been unable to save for retirement and have not made specific retirement plans.

Source: Ssrn.com, March 2015

Current U.S. Retirement Savings Deficit is $4.13 Trillion

Summary: EBRI releases data showing that the aggregate national retirement savings deficit is about $4.13 trillion for all U.S. households where the head of the household is between 25 and 64, inclusive.

Source: Ebri.org , March 2015

401k Participant Behavior in a Volatile Economy

Summary: The booms and busts of the late 1990s and 2000s have taken 401k plan participants on a rollercoaster ride. Paper examines how participants responded to these periods of economic expansions and contractions by documenting changes in 401k participation, contributions, and contribution rates from 1990 to 2009.

Source: Urban.org, March 2015

How Do You Define Success for Your Defined Contribution Plan?

Summary: This five page paper presents an overview of common measures of DC plan success and other, less well-known contributing factors before describing a systematic approach to measuring a DC plan’s effectiveness and determining what actions to take to make ongoing improvements. It also puts forth a process under which the plan can achieve success.

Source: Sibson.com , March 2015

Canada Bucks Global Shift to DC Pensions

Summary: Canada's pension assets still overwhelmingly in DB plans. Defined contribution pension plans still account for a tiny minority of all pension assets in Canada even though they have emerged as the dominant pension vehicle in the United States.

Source: Pensionpulse.blogspot.com, March 2015

Retirement Security 2015: Roadmap for Policy Makers

Summary: The National Institute on Retirement Security commissioned its fourth nationwide public opinion research project monitor how Americans feel about their financial security in retirement and to assess their views on policies that could improve their retirement outlook. This research is intended to serve as a tool for policymakers, thought leaders and retirement service providers as they work to stem the retirement crisis and re-fortify the U.S. retirement infrastructure.

Source: Nirsonline.org , March 2015

Engaging the Next Generations in Retirement Savings

Summary: The challenge in addressing the savings deficit is complicated by the fact that employee education and communications strategies used by plan sponsors and consultants in the past to draw employees into the plan are not likely to resonate with Gen X and Gen Y. This white paper identifies some distinguishing characteristics of Gen X and Gen Y and suggests strategies that plan sponsors may want to adopt to engage younger workers in retirement savings today so they can achieve retirement readiness in the years to come.

Source: Calamos.com , March 2015

Employee Demographics Play Role in QDIA Selection

Summary: Companies that sponsor 401k plans need to consider employee demographics when deciding which types of qualified default investment alternative to offer, according to research by Manning & Napier.

Source: Benefitnews.com, March 2015

The Average Retirement Age -- An Update

Summary: Labor force activity among older Americans began rising in the mid-1980s due to changing Social Security incentives, the shift to 401k plans, and improving health, longevity, and education. Updated data, however, suggest that these factors may have played themselves out. As a result, the average retirement age has increased only slightly in the last 10 years: to 64 for men and 62 for women.

Source: Bc.edu , March 2015

15 Considerations for Your DC Plan in 2015

Summary: A list of 15 considerations for defined contribution plan sponsors to contemplate over the course of 2015. Some topics are potentially time-sensitive items that could be addressed this year, while others are longer-term suggestions.

Source: Rocaton.com , March 2015

2015 Defined Contribution Trends

Summary: This is an Executive Summary of Callan's Defined Contribution Trends survey. Survey results incorporate responses from 144 plan sponsors, primarily large and mega 401k plans.

Source: Callan.com , March 2015

Institutional Investor Expectations, Manager Performance, and Fund Flows

Summary: Study analyzes institutional investors' expectations about the future performance of fund managers and the impact of those expectations on asset allocation decisions. It finds that institutional investors allocate funds mainly on the basis of fund managers' past performance and of investment consultants' recommendations, but not because they extrapolate their expectations from these. This suggests that institutional investors base their investment decisions on the most defensible variables at their disposal.

Source: Ssrn.com, February 2015

Racial Disparities in 401k Savings Behavior

Summary: This paper examines 401k saving behavior of continuously employed workers over an eight-year period at a single, geographically diverse employer. Paper demonstrate substantial difference in 401k savings behavior by employee ethnicity even within a single employer 401k plan architecture.

Source: Nber.org, February 2015

Companies Are Improving Automatic Features in 401k Plans

Summary: To improve the long-term financial outlook for workers, a new survey from Aon Hewitt, reveals that the majority of companies now offer automatic features in their 401k plans to ensure that workers are saving enough to receive full company matching contributions over time.

Source: Wolterskluwerlb.com, February 2015

New Mortality Tables Shine Spotlight on 401k Plans

Summary: While there has been lots of discussion about the impact the new mortality tables will have on pension plans, there's been far less talk about how longer life spans also affect DC plan participants. Yet the average employee shares the same goal as any defined benefit plan: accumulate sufficient assets to provide a targeted percentage of preretirement income for their remaining lifespan.

Source: Cfo.com, February 2015

Comparison of Retirement and Deferred Compensation Plans

Summary: Whether it is when we are growing up, in school, or in our careers, we tend to gravitate towards those who are most like us and form groups. It makes sense then that when we start to think ahead to the future and retirement plans, we would do the same. The government thinks the same and has established 403(b) and 457(b) plans in addition to the standard 401k plan. Article outlines and compares these plans so that you can review what make each unique.

Source: Belfint.com , February 2015

Automatic Enrollment, Employer Match Rates and Employee Compensation in 401k Plans

Summary: This study examines the relationship between automatic enrollment and employee compensation. A significant negative correlation exists between the generosity of the employer match structure and the automatic enrollment provision. However, study finds no evidence that total compensation costs or DC costs differ between firms with and without automatic enrollment, and no evidence that DC costs crowd out other forms of compensation.

Source: Ssrn.com, February 2015

Failing 401k Sponsors Cling to Their Own Stock

Summary: Companies with high levels of their own stock in their retirement plans often fail to scale back their exposure even when they're heading into financial straits, according to a new study. The result, the study said, can lead to significant losses to participants' retirement savings, suggesting a need for limits on how much such stock should be held by a company plan.

Source: Benefitspro.com, February 2015

Will Employers Scrap DC Plans Because of the ORPP?

Summary: Sixty-six percent of Ontario companies may consider eliminating their existing DC or group registered retirement savings plan if the Ontario Retirement Pension Plan (ORPP) is introduced, according to a survey.

Source: Benefitscanada.com, February 2015

Top 1% of 401k Plans Hold Bulk of Assets

Summary: The top 1% of 401k plans owns a lopsided proportion of defined contribution retirement assets. Of the 540,000 active 401k plans as of the end of last year, 5,400, or 1% of sponsoring employers, held $3.06 trillion, or 71% of all assets, according to an analysis from Judy Diamond Associates.

Source: Thinkadvisor.com, February 2015

Recordkeeper Data Show Plan Participants' Commitment to Saving

Summary: ICI's latest study of retirement plan savers' actions shows Americans' continuing commitment to saving for retirement. The study includes data from January through September 2014 and is based on defined contribution plan recordkeeper data covering about 25 million participant accounts at employer-based DC plans.

Source: 401khelpcenter.com, February 2015

Nine in 10 Canadian DC Plan Sponsors Meet Their CAP Goals

Summary: Ninety-seven per cent of defined contribution plan sponsors and 90 per cent of registered retirement savings plan sponsors say their plans are meeting their original Capital Accumulation Plan (CAP) objectives, reveals the Great-West Life study, 2014 CAP Benchmark Report.

Source: 401khelpcenter.com, February 2015

GAO Issues 401k Cash-Out Report

Summary: The GAO report is generally critical of the current procedures for ‘forced’ 401k plan rollovers, generally transfers of balances of $5,000 or less to an IRA without the participant's consent. This article reviews the report and the GAO's recommendations.

Source: Octoberthree.com, February 2015

The Impact of Leakages on 401k/IRA Assets

Summary: As 401k's and IRAs have become the dominant source of retirement saving, the potential for pre-retirement withdrawals ("leakages") has grown. Estimates indicate that about 1.5 percent of assets leaks out of 401k's/IRAs each year, reducing wealth at retirement by about 25 percent. Given the size of leakages, it may be time to take steps to curtail them.

Source: Crr.bc.edu , February 2015

Infographic - Five Facts About The World's Largest Pension Funds

Summary: This interesting Towers Watson infographic illustrates the top five facts arising from the joint research of the largest global pension funds in 2013.

Source: Towerswatson.com, February 2015

Pension Trends: Is Phased Retirement an Option for Your Employees?

Summary: More employees are working in retirement and it's not just about the money. A 2014 survey of Municipal Retirees Organization Ontario (MROO) members revealed 28% of the 1,580 respondents have paid part-time post-retirement jobs. Even seniors with a solid pension aren't always ready to stop working.

Source: Benefitscanada.com, January 2015

U.S. Retirement Crisis Getting Worse According to Report

Summary: A Center for American Progress report says there are three clear trends in particular that illustrate how Americans are unprepared for retirement: a large percentage of Americans aren't saving for retirement, families that are saving often have insufficient assets, and households should increase their savings relative to prior generations but aren't doing so.

Source: Benefitscanada.com, January 2015

Individuals Approaching Retirement Have Options (Literally) to Secure a Comfortable Retirement

Summary: This paper examines the critical final five year period leading up to retirement and analyzes whether traditional asset allocation strategies effectively and consistently assist individuals in reaching their retirement income goals as they approach retirement. These traditional strategies are evaluated against alternative, option based investment strategies that assure a certain amount of retirement income, after adjusting for inflation, while maximizing stock participation with the remaining funds in the portfolio through the use of options.

Source: Ssrn.com, January 2015

DC Sponsors' Big Concern: Controlling Costs

Summary: In its forward-looking survey for 2015, Aon Hewitt found defined contribution plan sponsors are pretty preoccupied with controlling fees and expenses.

Source: Moneymanagementintelligence.com, January 2015

Average 401k Balance Hits Record

Summary: 401k balances reached a record high last year, thanks to a soaring stock market and larger contributions from workers participating in the savings plans.

Source: Cnn.com, January 2015

2014 Plansponsor DC Survey: Plan Benchmarking

Summary: The retirement plan industry's reinvigorated focus on fees has been a positive development overall for plan participants, leading to better prices and greater transparency. Article looks at the big picture in plan fee benchmarking.

Source: Plansponsor.com, January 2015

Debt Stands in the Way of Retirement Readiness

Summary: Eighty-one percent of working age people surveyed by HSBC Bank said saving for retirement is not their main priority. Other priorities included paying off debts (24%), saving for children's education (8%), saving for a rainy day (8%) or a vacation (6%). The survey found major life events have affected more than three-quarters (76%) of pre-retirees' retirement saving.

Source: Planadviser.com, January 2015

Custom Target-Date Funds Gaining in DC Plans

Summary: Defined contribution plans are sharply cutting back on target-date funds offered by recordkeepers and also expanding use of custom target-date funds, according to a survey by Callan Associates.

Source: Pionline.com, January 2015

Automatic Enrollment: The Power of the Default

Summary: Sponsors can use the inertia inherent in participant retirement savings decisions to improve retirement outcomes in defined contribution plans. This 16 page report provides updated statistics drawn from Vanguard recordkeeping data of the effects of automatic enrollment on participants' saving and investing behaviors.

Source: Vanguard.com , January 2015

Employers Offering More Retirement Planning Tools and Reducing DC Plan Costs

Summary: Aon Hewitt survey shows employers are offering more tools and resources to improve financial outcomes for workers. Companies are also taking steps to reduce defined contribution plan costs to improve returns.

Source: 401khelpcenter.com, January 2015

De-branding the 401k Fund Menu

Summary: DC plan sponsors face several problems when they make a significant commitment to a brand name fund, especially when it is the only investment option for a specific asset class. This raises the question: What is gained by having a brand name fund in the 401k plan's fund menu?

Source: Russell.com , January 2015

Finding "Best Fit" in a Retirement Plan Provider Through the RFP Process

Summary: Rather than relying upon purely quantitative comparisons of data from competing proposals, plan sponsors should base their final decision on a more balanced set of factors that can help them achieve "best fit" with a prospective provider. Article discusses three areas of fit that are essential to a successful sponsor-provider relationship.

Source: 401khelpcenter.com, January 2015

Change in Average 401k Account Balances

Summary: This is a one page chart of the change in average account balances (by age and tenure) from January 1, 2014 - January 1, 2015 among consistent 401k participants with account balances on December 31, 2013.

Source: Ebri.org , January 2015

Deciding What Is Reasonable: Assessing Fees Using Value and Outcomes

Summary: With greater transparency around fees, plan sponsors now have more information than ever before to evaluate the fees they are paying for plan services. However, many sponsors aren’t quite sure how to use and apply the large amounts of information provided by the DOL's 408(b)(2) fee disclosure regulations. Paper lays out a four-step process, developed by fiduciary expert Donald Trone, to make reasonably informed and knowledgeable assessments about fees.

Source: Tiaa-Cref.org, December 2014

New 401k Participants Rely on Target-Date Funds

Summary: The evolution of 401k plan designs has resulted in a significant increase in the use of balanced multi-asset-class funds (in particular, target-date funds) by recently hired employees, a December 2014 research report shows.

Source: Shrm.org, December 2014

Canadians Want to Pay Down Debt

Summary: A new poll show that retirement planning is declining in importance compared to more immediate financial concerns. Canadians nearing retirement age have significantly shifted their focus to reducing debt.

Source: Benefitscanada.com, December 2014

DC Participants Seek Certainty

Summary: The desire of plan sponsors and participants to increase the certainty of reaching retirement objectives increases the focus on retirement income as the expected destination; yet neither group is fully grasping the trade-offs between the expectation for performance/return and the probability of success. PIMCO's Philip Chao discusses the DC plan design process, suggesting that plan sponsors start with setting the plan's objective and defining how to measure success.

Source: Pimco.com , December 2014

Retirement Readiness: A Broader Perspective

Summary: This paper creates an awareness of significant obstacles that employees face as they enter retirement. Specifically, this paper highlights debt risk in retirement, cognitive risk in retirement, and healthcare issues in retirement.

Source: Multnomahgroup.com, December 2014

2015 Reporting and Disclosure Calendar for Benefit Plans

Summary: This detailed 27 page Reporting & Disclosure Calendar for Benefit Plans is intended to indicate general reporting and disclosure requirements applicable to pension and health and welfare benefit plans on an annual basis. It does not cover all special requirements that may apply in a particular year due to an extraordinary event (e.g. plan termination) or that may apply only to a particular class of participants (e.g. highly compensated employees or nonresident aliens).

Source: Sibson.com , December 2014

Teacher Retirement Plans: Case Studies Indicate Value of Pensions

Summary: This report examines the retirement benefit elections of teachers in two states when new teachers have a choice between a defined pension plan or a plan that combines a defined contribution individual account with a DB pension. The analysis finds that since 2008, teachers in both states show a preference for the stand-alone DB pension.

Source: Nirsonline.org , December 2014

One in Five Investors Have Tapped Into 401k Prematurely

Summary: The majority of nonretired investors in the U.S. say their employer offers a 401k plan, and of these, 89% say they participate in it. Yet 21% of those who participate in such a plan say they have either taken out a 401k loan or even taken an early withdrawal from the plan in the last five years.

Source: Gallup.com, December 2014

Greater Protections Needed for 401k Forced Transfers and Inactive Accounts

Summary: Millions of employees change jobs each year and some leave their savings in their former employers' 401k plans. If their accounts are small enough and they do not instruct the plan to do otherwise, plans can transfer their savings into an IRA without their consent. In this report, the GAO examines the implications for plan participants of being forced out of plans and into these IRAs.

Source: Gao.gov, December 2014

Countdown to a Better DC Plan

Summary: Citing results from Callan's annual DC Trends Survey, paper explores plan sponsor adoption of PPA provisions to see how they have benefited, where they have met challenges, and where they could do more. Organizes around seven takeaways to help sponsors better position their plans in 2015.

Source: Callan.com , December 2014

401k Plan Asset Allocation, Account Balances, and Loan Activity in 2013

Summary: This comprehensive 56 page report is an update of EBRI and ICI's ongoing research into 401k plan participants' activity through year-end 2013.The report is divided into four sections: the first describes the EBRI/ICI 401k database; the second presents a snapshot of participant account balances at year-end 2013; the third looks at participants' asset allocations, including analysis of 401k participants' use of target-date, or lifecycle, funds; and the fourth focuses on participants' 401k loan activity.

Source: Ebri.org , December 2014

Majority of New 401k Participants Rely on Balanced and Target-Date Funds, EBRI

Summary: The evolution of 401k plan designs has resulted in a significant increase in the use of balanced funds, including target-date funds, by recently hired 401k plan participants in 2013 compared with recently hired participants 15 years ago, according to a newly updated annual report by the Employee Benefit Research Institute (EBRI).

Source: Ebri.org , December 2014

Baby Boomers Are Revolutionizing Retirement, Are Employers Ready?

Summary: The nonprofit Transamerica Center for Retirement Studies just released a new report, Baby Boomer Workers are Revolutionizing Retirement: Are They and Their Employers Ready?, which examines the retirement vision among Baby Boomer workers (born between 1946 and 1964) and the level of involvement among employers to facilitate their transitioning into retirement. Report details included in article.

Source: 401khelpcenter.com, December 2014

Ten Tips for Retirement Plan Executives and Managers

Summary: This article examines ten proven actions that all executives can follow to significantly and quickly improve their organizations' ERISA-related risk management programs.

Source: Rolandcriss.com , December 2014

The Australian Retirement Income System: Comparisons With and Lessons for the United States

Summary: Paper briefly compare the Australian and US economies and demographics, and then describes the Australian arrangements and assess its econ efficiency and efficacy in delivering retirement support. Concludes by considering insights for the evolution of the US pension reform debate as demographic change unfolds.

Source: Pensionresearchcouncil.org, December 2014

ERISA Advisory Committee on Lifetime Plan Participation

Summary: The ERISA Advisory Council presented its recommendations on two retirement issues it studied in 2014: Facilitating Lifetime Plan Participation and Outsourcing Employee Benefit Plan Services. This article discusses their recommendations on "lifetime plan participation" and how they may play out in regulatory or sponsor initiatives.

Source: Octoberthree.com, December 2014

PSCA Releases Research on 403(b) Plans

Summary: Most not-for-profit organizations believe they have a responsibility to encourage their employees to save for retirement, but only 10.6 percent of those organizations are able to measure potential participant outcomes as part of their retirement plans, according to a new survey of 403(b) plan sponsors from the Plan Sponsor Council of America.

Source: 401khelpcenter.com, December 2014

For Retirement Preparation, Higher Ed Is at the Head of the Class

Summary: College faculty and staff are better prepared for retirement than the general population, according to a new TIAA-CREF survey. In addition to saving in their employer-sponsored retirement plan, 42 percent of higher education employees have saved in an IRA, compared to 34 percent of American employees overall. While 36 percent of college faculty and staff say they have met with a financial advisor, only 22 percent of the general population report the same.

Source: 401khelpcenter.com, December 2014

Changes to Plan Design Result in Better Outcomes and Increased Plan Participation

Summary: White paper from Prudential has found that changing a plan's design, including the addition of an in-plan guaranteed lifetime income solution, improved participation and contributions. According to the paper, plans can increase participation rates nearly 35 percent by making slight modifications to plan design, with the addition of a lifetime income solution and the use of auto enrollment and auto escalation.

Source: Prudential.com , December 2014

401k Plan Costs Decline As Indexing Becomes More Popular

Summary: Average asset-weighted total plan costs for 401k plans dropped to 39 basis points in 2012 vs. 49 basis points in 2009, according to a report released Monday. The decline in expenses, management fees, administrative fees, advice fees and other costs, was felt most strongly by the largest plans and the smallest plans, the report said. One possible contributor to lower costs is the growing popularity of index funds.

Source: Investmentnews.com (free registration may be required), December 2014

Plan Profile Series: A Close Look at 401k Plans

Summary: This 64 page BrightScope/ICI Defined Contribution Plan Profile focuses primarily on private-sector 401k plans. It analyzes more than 35,000 DC plans that have between four and 100 investment options. This report focuses on plan year 2012, presenting data on how 401k plans are structured, the types of service providers that plan sponsors engage with, and the fees and expenses paid by 401k participants and plan sponsors for these services.

Source: Ici.org , December 2014

What Do Jelly Beans and the Stock Market Have in Common?

Summary: This white paper reveals the results of an experiment on how jelly beans and the stock market have more in common than you may think. Hint, if you believe that the market has it wrong, you are pitting your knowledge or hunches against the combined knowledge of millions of other market participants.

Source: Greenspringwealth.com , December 2014

Fee Compression Slowing, Fee Structures Changing

Summary: Asset levels continue to peak in DC plans, driving fees tied to asset levels higher in the investment management as well as recordkeeping and administration marketplaces. However, after three straight years of material compression in recordkeeping and administration expenses, the market may have found equilibrium.

Source: Multnomahgroup.com, December 2014

Evaluating Plan Expenses: A Road Map of Possible Routes and Potholes to Avoid!

Summary: It is important for plan fiduciaries to understand that while certain plan expenses can be paid out of plan assets, such expenses must be reasonable. A plan fiduciary must also evaluate and defray investment fees and expenses as part of that process because such costs could have a significant impact on plan investment returns. Therefore, to fully satisfy his/her fiduciary obligations with respect to a plan, each fiduciary should understand how to evaluate the myriad of plan fees, including unraveling those associated with various plan investments and plan services. This article provides guidance.

Source: Drinkerbiddle.com , December 2014

Hiring a Quality Auditor to Perform Your Employee Benefit Plan Audit

Summary: The AICPA Employee Benefit Plan Audit Quality Center prepared this 24 page advisory to provide plan sponsors, administrators, and trustees with an understanding of the importance of hiring a quality auditor to perform their employee benefit plan financial statement audit, and information to help select a quality auditor.

Source: Aicpa.org , December 2014

Roadmap to a Successful Tiered Investment Menu Design and Communication Program

Summary: Plan fiduciaries have an important task of managing fiduciary responsibility and, at the same time, designing an investment menu that is easily understood by participants and addresses the needs of a diverse participant base. Thoughtful investment design can help lead to better participant outcomes. This paper suggests that a first step is to shift the focus of menu design to a tiered structure, based on a plan's unique needs and the level of participant involvement.

Source: Manning-napier.com , December 2014

A Road Less Traveled: Including Alternative Investments in a 401k Plan

Summary: There has been a steadily increasing acceptance of alternative investments as part of a retirement plan's investment portfolio, including in 401k plans. Their appeal lies in their unique asset classes and investment strategies which offer potentially higher returns, diversification, or downside risk protection. This article by Marcia Wagner discusses some of the issues raised by including alternative investments in 401k plan investment menus.

Source: Wagnerlawgroup.com , November 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.