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Younger 401k Participants Favor Investment in Equities

Younger 401k plan participants tend to favor equity investing more than older participants. That's a key finding from a new joint study from EBRI and ICI which found that at year-end 2020, 42% of 401k plan participants' account balances were invested in equity funds, on average, in line with recent years. Another 35% of 401k participants' account balances were invested in balanced funds, largely target-date funds.

Source: 401kspecialistmag.com, November 2022

Participants Admit Auto-Enrollment Kickstarts the Retirement Savings Journey

As more employees ask for retirement planning vehicles in their employer-sponsored plans, a Principal study finds automatic features help participants achieve their largest share of retirement income. The latest research from Principal shows that over half (51%) of 725 respondents attributed auto-enrollment to kickstarting their retirement savings journey, and 81% said it helped them begin saving even sooner.

Source: 401kspecialistmag.com, November 2022

How Engaged 401k Participants Are Saving Significantly More

When it comes to 401k participant savings rates, engagement matters, a lot. Engaged participant savings rates are a remarkable 56% higher than rates for unengaged participants, according to Empower's just-released second annual research study, Empowering America's Financial Journey: How People Save, Invest and Get Advice.

Source: 401kspecialistmag.com, November 2022

Americans Are Increasingly Directing Attention to Retirement Plans

New findings from Voya Financial show that a workplace retirement plan is just as important for employee retention as a competitive salary and flexible work arrangements. Sixty percent of employees surveyed said they were more likely to stay with their current employer if they offered an employer-sponsored retirement plan, compared to 64% who said they would stay for a competitive compensation package and 63% for flexible work hours.

Source: 401kspecialistmag.com, November 2022

Workers React to Retirement Language and Imagery

Organizations are taking a psychological approach to analyze the way Americans think about their retirement. New research from Capital Group studied close to 2,500 American adults and how they respond to retirement language and imagery, confirming a finding that the industry has understood for some time, there is no one-size-fits-all approach to retirement communications.

Source: 401kspecialistmag.com, November 2022

Report Urges Pension Plan Fiduciaries to Focus on Finance When Considering ESG Factors

A new report from the C.D. Howe Institute says pension plan fiduciaries shouldn’t ignore climate change and other environmental, social, and governance factors that are relevant to financial purposes. However, when plan fiduciaries use ESG factors to prioritize social or environmental concerns, such as those expressed by plan members, they put themselves on shaky legal ground, said the report.

Source: Benefitscanada.com, November 2022

Arbitration of ERISA Plan Disputes

This article discusses the general enforceability of arbitration clauses in certain disputes, including class actions, with a particular focus on the enforceability of arbitration clauses involving legal claims made under ERISA. It also specifically analyzes the advantages and disadvantages of arbitration provisions for retirement plan sponsors.

Source: Wagnerlawgroup.com, November 2022

October a Light Trading Month for 401ks: Alight

October was another light trading month for 401k plan investors, according to the latest iteration of the Alight 401k Index. With just two above-normal trading days, the index revealed stable value funds accounted for over 80% of net inflows, while outflows were primarily from target date funds (37%), company stock (35%), and large U.S. equity funds (12%).

Source: 401kspecialistmag.com, November 2022

Callan: DC Plan ESG Use Drops in '22 on Backlash, Rule Confusion

Pushback against ESG investing by state governments and some in the investing community led to a drop in use among institutional investors this year, according to research released by fund consultant Callan. In annual surveying of 109 institutional investors on environmental, social, and governance implementation, Callan found just 35% of respondents incorporated ESG factors into investment decisions this year, down from 49% in 2021.

Source: Plansponsor.com, November 2022

Self-directed Retirement Plan Participants Allocate Few Assets to In-Plan ESG Funds

Self-directed retirement plan investors infrequently allocate to environmental, social, and governance investments, new research finds. The research, by PGIM and the Employee Benefit Research Institute, examined the allocation decisions of 9,324 new defined contribution plan participants, across 108 DC plans, who are directing their accounts and where there is at least one ESG fund available in the core menu.

Source: Plansponsor.com, November 2022

Political Pressure Aside, Asset Managers Stand Pat on ESG Integration

Regardless of the divided political pressure surrounding environmental, social, and governance investing, asset managers remain committed to considering such factors, with climate change remaining a top priority for firms, a new Cerulli report suggests.

Source: Napa-net.org, November 2022

Among Higher-Ed, DC Plans Viewed as Top Benefit for Attracting Talent

Findings from a bi-annual survey of retirement plan decision-makers in the higher education sector show that the DC plan is the No. 1 most important benefit for attracting and retaining talent. What's more, 90% also agree that a DC retirement plan helps attract high-quality employees, and 87% agree it helps retain high-quality employees.

Source: Napa-net.org, October 2022

What DC Plan Sponsors Should Know About Recent Litigation Trends: Part 1

Callan reviewed 165 lawsuits filed against mid- to mega-sized defined contribution plans ($175 million to $10 billion-plus) between January 2019 and August 2022, to provide an analysis of trends in litigation centered on the fiduciary duties outlined in ERISA. For ERISA litigation, 2020 was a bumper year, with 73 new cases filed. After the U.S. Supreme Court agreed to hear Hughes v. Northwestern in September 2021, the rate of new lawsuits slowed. As a result, 2021 saw only 39 lawsuits. After the decision was issued in January 2022, the rate of litigation resumed. As of August 15, this year has seen 32 new lawsuits.

Source: Callan.com, October 2022

What DC Plan Sponsors Should Know About Recent Litigation Trends: Part 2

Callan reviewed 165 lawsuits filed against mid- to mega-sized DC plans ($175 million to $10 billion-plus) between January 2019 and August 2022, to study trends in DC plan litigation centered on the fiduciary duties outlined in ERISA. The first article on this topic outlined some major findings. This article discusses the four key themes identified in Callan's analysis of these suits.

Source: Callan.com, October 2022

401k Study Finds Millennials and Gen Z Take Advantage of Broader Range of Retirement Resources Than Previous Generations

Young workers are relying on more than their 401ks to save for retirement as other types of investments play a greater role in their long-term wealth plans, according to the annual nationwide survey of 401k plan participants from Schwab Retirement Plan Services. While the 401k remains the top retirement savings vehicle for today's workers overall, Gen Z and Millennial workers are more likely to also invest in cryptocurrency, real estate, annuities, and small businesses, unlike older generations.

Source: Businesswire.com, October 2022

Four Generations of Workers Are Preparing for Retirement Amid an Uncertain Future

Seventy-six percent of workers say their life priorities changed as a result of the pandemic and 56 percent cite saving for retirement as a financial priority, according to Emerging From the COVID-19 Pandemic: Four Generations Prepare for Retirement, a survey report released by the nonprofit Transamerica Center for Retirement Studies in collaboration with Transamerica Institute.

Source: Transamericainstitute.org, October 2022

Providing Meaningful Access to, and Features in, Retirement Savings Plans to Address Savings Gaps and Boost Retirement Savings

Mintz Of Counsel Michelle Capezza authored this chapter in New York University's Review of Employee Benefits and Executive Compensation examining some of the ways that employers can provide their employees with meaningful access to retirement savings plans to address retirement savings gaps.

Source: Mintz.com, October 2022

Economy Forcing Cutbacks in 401k Contributions: Morgan Stanley

Because of the economic impacts related to inflation and/or concerns about a recession, 62% of employees report that they've needed to reduce contributions to their savings, with nearly a third (31%) reducing contributions to their 401k plans. That's a key finding from the latest research released today from Morgan Stanley at Work's second annual State of the Workplace Financial Benefits Study.

Source: 401kspecialistmag.com, October 2022

PSCA Releases 2022 403b Survey

As employers everywhere continue to recover from the long-term impacts of the COVID-19 pandemic and compete for talent, employer contribution rates to 403b plans rose almost 24% year-over-year from 4.6% in 2020 to 5.7% of gross annual pay in 2021, according to an annual 403b Plan Survey from the Plan Sponsor Council of America, part of the American Retirement Association.

Source: Psca.org, October 2022

Down Market Doesn't Stop DC Retirement Savers: ICI Report

Despite the volatile stock market, retirement saving continued to be a strong focus for defined contribution plan participants through the first half of 2022, according to new research from the Investment Company Institute.

Source: 401kspecialistmag.com, September 2022

Retirement Savers Continue Saving Despite Down Market in First Half of 2022

Retirement saving continued to be a strong focus for defined contribution plan participants through the first half of 2022, ICI research demonstrates. ICI's study tracks contributions, withdrawals, and other activity in 401k and other DC retirement plans, based on DC plan recordkeeper data covering more than 40 million employer-based DC retirement plan participant accounts at the end of June 2022.

Source: Ici.org, September 2022

US Workers Fear Exhausting Savings in Retirement

U.S. workers are more afraid of running out of money in retirement and more intimidated by financial matters -- such as long-term financial planning -- than workers in Europe are, yet Americans rate their financial well-being higher than do their counterparts across the pond, according to Alight research.

Source: Plansponsor.com, September 2022

Factors Contributing to Lower Retirement Confidence Among Women Who Are Not Married

Americans have near-record-high confidence in having enough money to live comfortably throughout retirement. However, unmarried women workers and retirees have lower retirement confidence than their married counterparts and are more likely to have lower incomes and assets. This 37-page report examines the attitudes, considerations, and behaviors surrounding the retirement of women workers and retirees of different marital statuses to provide greater insight into what can help improve women's retirement outcomes.

Source: Ebri.org, September 2022

Achieving Fiduciary Excellence

More advisory firms are seeking to differentiate themselves and grow AUM by formalizing their commitment to fiduciary excellence. 139 investment advisory firms from around the world have done just that, achieving certification by the Centre for Fiduciary Excellence, the gold standard for signifying adherence to fiduciary best practices. This report provides an inside look at how those advisory firms operate their practices.

Source: Broadridge.com, September 2022

How Gloomy Is the Retirement Outlook for Millennials?

Social, economic, demographic, and public policy shifts have made Millennial retirement security a pressing concern. Many recent trends threaten financial security for future generations of retirees. Male labor force participation pre-age 55 has slumped, men's median earnings have stagnated, marriage and homeownership rates are falling, debt levels remain high, and out-of-pocket spending on medical and long-term services and supports are rising. Other trends are more encouraging, such as women's higher earnings, the rise in labor force participation at older ages, and improvements in educational attainment.

Source: Upenn.edu, August 2022

Dated Thinking May Be Holding Back Annuities

Annuities deserve a fresh look from plan sponsors, according to retirement industry veterans with years of experience in retirement income strategies. Despite product innovations and improvements, the perception of annuities among many plan sponsors is stuck in the past, says Rona Guymon, senior vice president of annuity distribution, at Nationwide Financial. The persistence of myths and misunderstandings about annuities are likely holding back greater adoption, she adds.

Source: Plansponsor.com, August 2022

Plan Sponsor Activity and Engagement Set to Heighten: Study

Fidelity Investments announced the results of the 13th edition of its Plan Sponsor Attitudes Study. The study characterizes 2022 as a year of change for the retirement plan industry with plan activity and competition amongst plan advisors hitting multiyear highs.

Source: Businesswire.com, August 2022

Emergency Savings = Better Retirement?

Of all the statistics about financial anxiety, one of the most alarming is that 36% of Americans in 2020 reported that they would be unable to meet an unexpected $400 expense without borrowing or selling a personal item. Alarming, yes but what does that have to do with retirement? A great deal. There are two ways a financial emergency can undermine retirement and why plan sponsors may want to consider taking action. The first is the direct damage that emergency withdrawals or loans can do to retirement savings. The second is more subtle.

Source: Blackrock.com, August 2022

Modest Deferral Rate Increases Could Have a Big Impact on Retirement Readiness

A modest increase in participant elective deferral rates would enable most plan participants to attain a 75% replacement rate in retirement, according to new research by Vanguard. To assess whether Vanguard DC plan participants are saving optimally in their current workplace retirement plan, Vanguard researchers analyzed approximately 1.9 million eligible employees and 1.5 million actively contributing participants in approximately 880 plans for which the firm had completed compliance testing as of December 2020.

Source: Ntsa-net.org, August 2022

Four Trends to Watch in 2022 and Beyond

Insights from the inaugural 2022 BlackRock "Read on Retirement" reveal a shifting landscape following over two years of market volatility, inflation, and a pandemic. The pandemic and recent market conditions understandably caused people to rethink their outlook on retirement and what they will need. It also inspired employers to offer more strategies to help employees save for the short and long-term. Here are four key findings from the survey that are trends to watch this year and beyond.

Source: 401kspecialistmag.com, August 2022

What Mutual Fund Fee Disparities Mean for Retirement Savings

When employees decide to leave their employer-sponsored retirement plan, either through retirement or a job change, many decide to roll their savings over into an individual retirement account. A recent study suggests that this can be a risky move financially, as IRA owners are more likely to face higher costs over time. According to a Pew issue brief, when an individual moves their savings over into an IRA, thousands of dollars in savings can be lost over time, simply because of differences in fees between funds or between types of shares within a fund.

Source: Planadviser.com, August 2022

Mega DC Plans Nudge Workers to Increase Savings

The 50 largest defined contribution plan sponsors custodied by Northern Trust Asset Management have focused on getting workers to boost their retirement savings with automatic features, according to data from the firm. Plan sponsors are using auto-escalation to boost savings, but they are not focused on retirement income or decumulation options for plan participants.

Source: Plansponsor.com, July 2022

Retirement Confidence Has Declined Across Generations

Inflation is proving a punch to the gut for workers' retirement confidence, new BlackRock survey data show. The survey found that across generations -- Generation Z, Millennials, Generation X, and Baby Boomers -- more workers feel unprepared or unsure if they are on track for retirement (37%) than in the previous three years. Feeling unprepared for retirement is highest for women, with 47% reporting they lack confidence, according to the survey.

Source: Plansponsor.com, July 2022

State Auto-IRAs Continue to Complement Private Market for Retirement Plans

Pew did an initial examination of data from the annual filings by employer-sponsored plans from 2013 to 2019 to the Department of Labor. The analysis suggested that, in those states that have created auto-IRA programs, employers with plans continue to offer them, and businesses without plans are adopting new ones at rates similar to before the state options were available. Updated data for 2020 show comparable results, despite the impact of COVID-19 on the economy more broadly.

Source: Pewtrusts.org, July 2022

Inflation Chipping Away at Workers' Ability to Save for Retirement

Inflation is now the top obstacle to saving for a comfortable retirement, according to a new survey from Schwab Retirement Plan Services. In response to rising costs and market volatility, 79% of workers are changing their saving and spending habits, while 44% have altered their 401k investments.

Source: Napa-net.org, July 2022

Who Should Be Trustee of Your 401k Plan?

When a company establishes a 401k plan it is necessary to name a trustee of the plan. This is a very important decision that is not always given the careful deliberation that it deserves. This article covers why it is such a crucial decision and outlines some of the options for naming a plan trustee.

Source: Eforerisa.com, July 2022

Study Shows Workers Struggling Against Inflation to Save and Invest for Retirement

Inflation is now the top obstacle to saving for a comfortable retirement, according to a new survey from Schwab Retirement Plan Services. The annual nationwide survey of 401k plan participants finds that workers rank inflation (45%) ahead of other obstacles including keeping up with monthly expenses (35%), stock market volatility (33%), and unexpected expenses (33%).

Source: Businesswire.com, July 2022

Inflation Fears Cut Into Retirement Savings, Confidence

More Americans (37%) spanning generations and demographics feel unprepared or unsure if they are on track for retirement compared to the previous three years, and women are even less certain, according to a new survey.

Source: Napa-net.org, July 2022

Inflation and Retirement: Here's How Plan Sponsors Can Respond

Because inflation has been low for decades, plan sponsors didn't give it much thought. But as inflation rates rise above 7% and even 8%, it's cutting into retirement plan participants' returns. Here's what plan sponsors can do to help employees.

Source: Hubinternational.com, July 2022

2022 Recordkeeping Survey

The annual PLANSPONSOR Recordkeeping Survey was conducted in June via an online questionnaire. Recordkeepers of DC plans participated in the survey and provided the information outlined on the subsequent pages. The charts and profiles are aggregated and ranked by reported total assets, plans and participants. Specifically, the profiles offer a look into a breakdown of sponsor service offerings, participant services, and related offerings.

Source: Plansponsor.com, July 2022

How to Think About Recent Trends in the Average Retirement Age?

After a century of decline, work activity among older men stabilized in the 1980s and began to rise in the 1990s. This turnaround reflected changes in Social Security, retirement plans, the nature of work, education levels, and health coverage. In response, the average retirement age for men has risen by about three years. The goal of this 10-page paper is to put this three-year increase in context.

Source: Bc.edu, July 2022

Let States Be Savings Laboratories, Says Analysis

We'll pass on that, the U.S. Supreme Court said when asked to review a ruling on a challenge to the legality of CalSavers, California's state-run retirement plan for private-sector employees whose employers do not offer one. Congress should take the hint, suggests a recent analysis, and let the states experiment with similar plans undeterred. The High Court thus indirectly expressed the view that CalSavers does not violate ERISA, and that that bedrock benefits law is not an impediment, writes Edward A. Zelinsky, Morris and Annie Trachman Professor of Law at Yeshiva University, in the research paper "How Should Congress Respond to Jarvis? The Case for Letting States Experiment With Private Sector Retirement Savings Plans."

Source: Asppa.org, July 2022

Retirement Savings Rates Up, but Confidence Down: BlackRock

We've got a classic good news/bad news scenario coming out of BlackRock's just-released seventh annual retirement survey. The annual survey of plan participants and sponsors finds double-digit deferrals, but inflation curtails confidence in retirement readiness.

Source: 401kspecialistmag.com, July 2022

How Planning for Retirement Has Evolved

J.P. Morgan Asset Management has released its annual "Guide to Retirement," providing a detailed update on the retirement landscape and new insights into the saving and spending behaviors of retirees. According to the report, the best way to mitigate such wide-ranging challenges is to develop a comprehensive retirement plan and focus on what can be controlled. This includes maximizing savings as early as possible, understanding and managing to spend, and being well-diversified from an investment and tax perspective.

Source: Plansponsor.com, July 2022

Roughly Half of Americans Lack Access to Workplace Retirement Plans

Roughly half of the workers in the U.S. do not have access to a retirement plan at work, according to a new AARP study released this week. Nearly 57 million people -- 48% of American private sector employees ages 18 to 64 -- work for an employer that does not offer either a defined contribution plan or a pension plan.

Source: 401kspecialistmag.com, July 2022

401k Investors Had an Active Trading Month in June

Alight Solutions has published the June update of its 401k Index, noting that it was another active trading month for investors. There were five above-normal trading days in June, Alight says. All but three days in the month had net trading flows going from equities to fixed income.

Source: Planadviser.com, July 2022

Fund Fees Dropped Nearly $6.9 Billion in 2021

Continuing their two-decade decline, the average expense ratio paid by fund investors fell again last year, Morningstar's annual U.S. Fund Fee Study reports. The study, which evaluates trends in the cost of U.S. open-end mutual funds and exchange-traded funds, found that the asset-weighted average expense ratio of U.S. funds fell from 0.42% in 2020 to 0.40% in 2021, saving investors an estimated $6.9 billion as a result.

Source: Napa-net.org, July 2022

Changing Behavior for a More Secure Retirement

One of the keys to financial security in retirement is behavior; in particular, before retirement, and the earlier the better. That was the underlying message of an expert panel in a recent webinar concerning retirement readiness. In a recent EBRI webinar, panelists discussed retirees' views on their situations and how their decisions led to that, as well as what employers can do to empower future retirees to build a sound financial future and retirement.

Source: Asppa.org, July 2022

Has Vesting Gotten Controversial?

Against all odds, vesting schedules have become the stuff of headlines. Personal-finance writers around the U.S. are offering advice and insight into how employees should regard the schedule in which they vest in their employers' contributions to their defined contribution retirement plans. For workers in businesses that have shorter employee tenures, a long-graded vesting schedule could be seen as unfair to workers. But for plan sponsors, vesting schedules can control costs and help with employee retention.

Source: Plansponsor.com, July 2022

Plan Participants Have Modest Retirement Expectations

It might be time to put to bed the cliched, sunny depictions of retirees traveling overseas or enjoying their golden years carefree on the beach, a survey from Principal shows. A key retirement goal for 71% of workers is now merely to maintain their standard of living, according to the latest update of the Principal Retirement Security Survey. Meanwhile, 44% of individuals cited splurging periodically in retirement as a priority. Between these bookends, 47% of respondents said that not outliving their savings in retirement is a top goal.

Source: Plansponsor.com, July 2022

Study Finds Disconnect Between Actual and Perceived Retirement Risks

Retirees face many financial risks, such as outliving their money, investment losses, and unexpected health expenses, but a new study finds that they may be overestimating some risks while underestimating others. A new study by Wenliang Hou, a quantitative analyst at Fidelity Investments and former research economist at the Center for Retirement Research at Boston College, develops a lifecycle model of a typical retired household facing five categories of risk. /p>

Source: Napa-net.org, July 2022

Autoenrollment a Boon, Research Confirms

Proponents of automatic features for DC plans have long argued that they boost participation and savings rates, and a recent study confirms that belief. "Automatic enrollment in employer-sponsored 401(k) savings plans has transformed the way that millions of Americans save for retirement," said Joshua Dietch, Head of T. Rowe Price Retirement Thought Leadership, and Taha Choukhmane, Ph.D., MIT Sloan School of Management Associate Professor of Finance in their report.

Source: Napa-net.org, July 2022

Here's Why It's Vital to be a Consistent 401k Saver

A recent study of the EBRI/ICI 401k database analyzing trends in the average plan account balance of consistent participants underscores the powerful compounding effect of ongoing participation. The study found that at the end of 2019, 33% of the active group had more than $200,000 in their 401k plans at their current employers, while another 20% had between $100,000 and $200,000.

Source: Napa-net.org, July 2022

401k Mutual Fund Expense Ratios Continue to Drop

The downward trend in the expense ratios that 401k plan participants incur for investing in mutual funds continued in 2021, according to a new report from the Investment Company Institute. For equity mutual funds, the average expense ratios incurred by 401k investors declined from 0.39% in 2020 to 0.36% in 2021, the ICI notes.

Source: Asppa.org, July 2022

IRA Investors Pay Significantly More Than 401k Participants

Rolling retirement assets into an IRA can result in far higher costs to the individual retail investor than their institutional 401k participant counterpart. "An analysis of fee differences shows that the routine shifting of billions of dollars each year from 401ks -- which are often able to purchase lower-cost institutional shares -- into IRAs in which savers frequently purchase retail shares can translate into significantly higher costs for retail investors, costs that can eat into their long-term savings significantly," a new Pew Charitable Trusts report finds.

Source: 401kspecialistmag.com, July 2022

Communicating About Retirement Benefits Crucial to Retention

Employees say retirement benefits are important when deciding whether to leave an employer, but many employers are missing key opportunities to tell them about their benefits. More than 8 in 10 employees (82%) say their benefits -- specifically their retirement benefits (77%) -- are highly important in deciding whether they will change jobs, according to TIAA's 2022 Employee Retention Survey. And this comes as nearly a third of employees say they are considering leaving their jobs this year.

Source: Napa-net.org, June 2022

A Top Barrier to Retirement Saving: Education Costs

A quarterly tracking survey of experienced investors finds that education costs are having a significant impact on young investors' ability to save for retirement, but legislative relief could be coming soon. According to the results from E*TRADE from Morgan Stanley's most recent wave of StreetWise, the No. 1 reason Millennial and Gen Z investors take early withdrawals from their retirement savings account is to pay for education.

Source: Napa-net.org, June 2022

What Does Consistent Participation in 401k Plans Generate?

This paper provides an update of a longitudinal analysis of 401k plan participants drawn from the EBRI/ICI 401k database. Because the annual cross-sections cover participants with a wide range of participation experience in 401k plans, meaningful analysis of the potential for 401k participants to accumulate retirement assets must examine the 401k plan accounts of participants who maintained accounts over all of the years being studied (consistent participants).

Source: Ebri.org, June 2022

The Role of the 401k in Today's Tight Labor Market

In his role as managing director and head of retirement plan services at Schwab Retirement Plan Services, Brian Bender spends a lot of time thinking about the interplay of retirement benefits, compensation structures, and employee retention. According to Bender, ongoing cultural shifts have influenced both employees' expectations concerning workplace benefits and the evolving role of the 401k plan in talent management.

Source: Planadviser.com, June 2022

Access to CITs Creates Opportunity for 403b Plans

The topic of making CITs permissible investment vehicles in 403b plans has been covered extensively over the past several years. This 5-page paper focuses the dialogue on what will be the most important innovations and their potential outcomes should 403b plans be allowed to use CITs, namely: potentially lower costs and opportunities for greater administrative efficiency, flexibility for more investment innovation, and more choice in short-term investing options.

Source: Dciia.org, June 2022

401k Plans Are Failing Middle-Class Americans

A new report finds that the tax breaks designed to encourage Americans' retirement savings disproportionately benefit high-income households and do little to assist middle-class families. More than half of the tax breaks for defined-contribution plans, such as 401ks and individual retirement accounts, go to those whose income puts them in the top 10%, according to new research from the National Institute on Retirement Security, a nonprofit, nonpartisan organization established to contribute to informed policymaking.

Source: Investmentnews.com, June 2022

May Sees a Change of Pace in 401k Trading Activity

Following a month when there were no above-normal trading days despite high levels of market volatility, 401k traders seemingly decided to change course in May. According to Alight's May 2022 401k Index, 12 of 21 days in May had above-normal trading activity, but no day exceeded three times the daily average. In comparison, there were 16 above-normal days in the first four months of the year.

Source: Asppa.org, June 2022

Taking 401k Plan Design to the Next Level

In a testament to the willingness of plan sponsors to implement smart plan design, retirement plan participants broke new savings records in 2021, yet there is still more to be done, according to Vanguard's newest edition of How America Saves.

Source: Napa-net.org, June 2022

How Retirement Is Changing as We Live Longer

A new study by Edward Jones and Age Wave, "Longevity and the New Journey of Retirement," examines what it means to experience well-being and thrive in retirement, a journey that is not one-size-fits-all, and instead has many possible paths and variations. The study of more than 11,000 U.S. adults found that despite Americans' worries about health care and long-term care costs in retirement, they still desire to live longer, and nearly seven in 10 Americans (69%) want to live to age 100.

Source: Planadviser.com, June 2022

How Plan Sponsors Feel About Financial Advisers

In its new survey, "The Value of a Financial Advisor," Morgan Stanley examines how plan sponsors feel about financial advisers and how advisers affect employee outcomes. For plan sponsors, having dedicated financial advisers to help with investment oversight brings added peace of mind, a survey says.

Source: Planadviser.com, June 2022

Study Finds Plan Advisors Integral to Retirement Plan Participation and Outcomes

Morgan Stanley released new research from its inaugural workplace retirement study that shows plan sponsors see a positive impact and value in having a plan advisor oversee their workplace retirement plan to boost retirement plan participation and outcomes.

Source: Businesswire.com, May 2022

401k Plans Want More Personalized Retirement Solutions

Personalized solutions reportedly are becoming more attractive for plan sponsors who are encouraging those saving for retirement to remain with their 401k provider after they leave the workforce. That's according to PIMCO's 16th Annual Defined Contribution Consulting Study, which surveyed 36 consultants and advisory firms that serve more than 37,000 clients with $6.9 trillion in total assets in DC plans.

Source: Napa-net.org, May 2022

Why Small Business Owners Often Resist 401ks

At a time when many companies are boosting 401k benefits to attract and retain employees in a tight labor market, 74% of small businesses still do not offer a retirement plan for their employees, according to survey data published by ShareBuilder 401k. According to the survey, many small business owners mistakenly believe their business is simply too small and that 401ks are too costly.

Source: Planadviser.com, May 2022

Alight Data Finds 401k Plan Balances Hit Record Highs

A new report by Alight Solutions found that after a few years of turbulence, retirement savings are on the rise for US employees. Alight's 2022 Universe Benchmarks report revealed that the average defined contribution plan balance hit an all-time high of $144,280 at the end of 2021, up 10% from 2020. Median plan balances also increased, from $28,426 to $29,607, another record high.

Source: Alight.com, May 2022

2022 RCS Fact Sheet: Expectations About Retirement

Many workers continue to say they are behind in their retirement preparations, including saving for retirement. Consequently, what sources of income do workers expect to receive in retirement? How do workers' expectations align with retirees' experiences?

Source: Ebri.org, May 2022

2022 RCS Fact Sheet: Retirement Confidence

One in three Americans feel very confident about their ability to have enough money to live comfortably throughout their retirement years. Workers who say debt is a problem are, not surprisingly, less confident, while those who have a retirement plan are remarkably more confident.

Source: Ebri.org, May 2022

Got a Retirement Plan? Race Plays a Role

A new study takes a close look at who these people are and shows stark differences along racial lines. A large majority of Hispanic workers in the private sector -- two out of every three -- do not have access to a pension or 401k-style plan, and more than half of Black workers do not have access. Although the numbers are lower for Asians (45 percent) and whites (42 percent), they are still substantial.

Source: Bc.edu, May 2022

Small Business Owners Still Resistant to Starting a 401k Plan: Survey

At a time when many companies are boosting 401k benefits to attract and retain employees in a tight labor market, 74 percent of small businesses are still going without any plan at all. Key findings in new research commissioned by ShareBuilder 401k show that owners believe their business is too small and that 401(k)s are too costly. The survey, that polled 500 small business owners from across the country, reveals that only 26 percent currently offer a 401k plan. Responders cited three main reasons for not starting a plan.

Source: Prnewswire.com, May 2022

401k Investors Display Poise as the Market Struggles

Alight Solutions has published the April update of its 401k Index, noting that despite equity markets posting their worst month in over two years, 401k investors were not making reactionary trades. There were no above-normal trading days in April, Alight says. However, net transfers were up slightly compared to March (.10% vs .09%) as investors moved money out of equities and into fixed income.

Source: Planadviser.com, May 2022

Challenges Aside, Retirement Confidence Remains High: EBRI

Despite the pandemic and inflation, American workers and retirees remain optimistic about living a comfortable retirement and one key factor that has helped is having a workplace retirement savings plan. This is according to the 32nd annual Retirement Confidence Survey measuring worker and retirement confidence conducted by the Employee Benefit Research Institute and Greenwald Research.

Source: Asppa.org, May 2022

PEPs Pique Small Businesses' Interest, But Hurdles Remain

A new survey finds that small employers are interested in learning more about pooled employer plans, although there is still some hesitancy on the road to implementation. More than half of smaller employers surveyed by the Secure Retirement Institute that are considering a DC plan are interested in learning more about PEPs, regardless of whether they have a retirement plan currently in place.

Source: Napa-net.org, May 2022

Younger 401k Participants Really Like TDFs, New Study Finds

Target-date fund investing continues to be prevalent in 401k plans, particularly among younger participants, according to an updated joint study released today by the Investment Company Institute and the Employee Benefit Research Institute.

Source: 401kspecialistmag.com, May 2022

Proposed Changes to Prohibited Transaction Exemption Procedures: White Paper

Congress provided for three kinds of possible exemptions from prohibited transaction prohibitions: statutory exemptions, class exemptions, and individual exemptions. The DOL has long had regulations setting forth the procedures for applying for class and private exemptions and has granted many such exemptions over the last 48 years. Now, however, the DOL is proposing changes to its procedures that would significantly modify the process and create additional burdens on applicants and independent fiduciaries covered by the exemption.

Source: Wagnerlawgroup.com, April 2022

Annual 401k Benchmarking Data on Participant Behavior and Plan Design Published

T. Rowe Price released "Reference Point," its annual 401k benchmarking report featuring year-over-year data and analysis on participant behavior and plan design. The report is based on the firm's full-service recordkeeping client data. Key findings are reviewed here.

Source: Prnewswire.com, April 2022

EBRI: Challenges Aside, Retirement Confidence Remains High

Despite the pandemic and inflation, American workers and retirees remain optimistic about living a comfortable retirement and one key factor that has helped is having a workplace retirement savings plan. This is according to the 32nd annual Retirement Confidence Survey measuring worker and retirement confidence conducted by the Employee Benefit Research Institute and Greenwald Research. In fact, in 2022, 82% of workers who are offered a workplace retirement savings plan are satisfied with it, a finding that has remained steady from 2021.

Source: Napa-net.org, April 2022

Employer Skepticism of "Traditional" Target-Date Funds Grows

Concerns from employers over the effectiveness of what it calls traditional target-date funds in achieving successful retirement outcomes are on the rise, according to new research from TIAA. The survey revealed that 66% of employers feel TDFs will help employees meet their retirement income needs, down from 78% in a previous survey in 2020.

Source: 401kspecialistmag.com, April 2022

401ks Still Seen as Gateway for Black Investors, but New Risks Emerging

While 401k plans have been the gateway to investing for many black Americans over the last several decades, that finding does not appear to be as prominent, as risky investments grow in popularity, a new survey finds.

Source: Napa-net.org, April 2022

Research Finds Americans Overwhelmingly Preserved Retirement Nest Eggs in 2021

The majority of DC plan retirement savers continued saving for retirement in 2021 through their DC plans such as 401ks, according to ICI's "Defined Contribution Plan Participants' Activities, 2021." The study tracks contributions, withdrawals, and other activity in 401k and other DC retirement plans, based on DC plan recordkeeper data covering more than 35 million participant accounts in employer-based DC plans at the end of December 2021.

Source: Ici.org, April 2022

OECD Issues Recommendations for the "Good" Design of DC Retirement Plans

Because DC retirement plans have increasingly become an integral, if not the main, part of most countries' overall pension systems, the Organization for Economic Co-operation and Development recently issued several recommendations for the implementation and management of these plans. The recommendations are intended to build trust in the design of DC plans by ensuring that the best interest of plan participants is considered, as well as to improve the robustness of retirement systems.

Source: Georgetown.edu, April 2022

More 401k Participants Say Having ESG Options Could Inspire Them to Increase Contribution Rate

According to the Schroders 2022 U.S. Retirement Survey, 74% of defined contribution plan participants who lack or don't know if they have ESG investment options in their plan, said they would or might increase their contribution rate if offered ESG options. This is up from 69% who said the same in 2021.

Source: Businesswire.com, April 2022

How to Help 401k Plan Sponsors Cut Through ESG Confusion

When it comes to Environmental, Social, and Governance investing, regulatory changes are a big source of confusion for advisors and plan sponsors. "It's no surprise," said Bonnie Treichel, Chief Solutions Officer at Endeavor Retirement, "the apparent ESG regulatory back-and-forth over the past several years is enough to make even an ERISA attorney's head spin." The good news: When it comes to ESG, she's confident that advisors and plan sponsors can move forward.

Source: 401kspecialistmag.com, April 2022

Auto-Enrolled 401k Loan Protection Has Potential to Save $2 Trillion

Auto-enrolled 401k loan protection is a powerful tool to preserve retirement savings, according to new research from the Employment Benefit Research Institute and Custodia Financial. The study shows a remarkable $1.96 trillion in retirement savings can be preserved if employers automatically enroll employees in 401k loan protection when they borrow from their defined contribution retirement plans.

Source: 401kspecialistmag.com, April 2022

Alight Solutions 401k Index: First Quarter 2022 Observations

With volatility returning to Wall Street, 401k investors were busy traders in the first quarter of 2022, according to the Alight Solutions 401k Index. There were 16 above-normal trading days in the quarter, a stark contrast to the 3 above-normal days seen in 2021. Net transfers as a percentage of starting balances were 0.46%, nearly equal to the percentage seen in the prior twelve months (0.53%). Net trading activity significantly favored fixed income.

Source: Alight.com, April 2022

Collective Investment Trusts and Good Governance Considerations: Whitepaper/a>

This 14-page paper explores relevant portions under each of the three legs of the regulatory triad. In particular, it examines the regulatory emphasis on the central role that good CIT governance -- in the form of well-designed and implemented bank-maintained processes and procedures -- plays in the ongoing management and operation of CITs. It also addresses and discusses how regulatory considerations inform CIT governance policies and may be reflected and implemented through good governance practices.

Source: Wilmingtontrust.com, March 2022

Whitepaper: Debunking Recordkeeping Fee Theories in Excessive Fee Cases

According to Euclid's whitepaper, "most large defined contribution retirement plans in this country have low recordkeeping fees – fees that are often five to ten times lower than the recordkeeping fees in most under $100 million small-asset plans." This new whitepaper, authored by Euclid's Managing Principal Daniel Aronowitz, reviews the common tactics used by plaintiff law firms to allege excessive plan administration fees.

Source: Euclidspecialty.com, March 2022

2021 Was Another Banner Year for Retirement Savers

Employer-sponsored retirement plans and individual retirement accounts reached almost $40 trillion in total assets by the end of last year, even as a recovering economy faced some key pain points, according to new data released by the Investment Company Institute.

Source: Planadviser.com, March 2022

Survey Reveals Retirement Confidence Gap Across Generations

American workers of all generations put comfortable retirement among their top life goals, yet a large percentage are uncertain about how to plan for it, when to retire, and how they will pay for it, according to the latest Retirement Security Survey released by the Principal Financial Group.

Source: Principal.com, March 2022

Using Retirement Account Features for Short-Term Savings

Workers can often use retirement savings for unexpected expenses. However, policymakers have expressed an interest in helping workers save for emergencies in ways that do not draw down their retirement assets. Some proposals to increase short-term savings envision new add-on accounts. Other proposals would use existing features of employer-sponsored DC plans that allow funds to be used for unexpected expenses. This 3-page report discusses two of such existing features: deemed Roth Individual Retirement Accounts and after-tax accounts within qualified retirement plans.

Source: Congress.gov, March 2022

Plan Sponsors Adding 401k Enhancements

Employers are eyeing changes to their DC plans to improve their employees' retirement security and financial wellbeing and to help with recruitment and retention. In a survey of 363 DC plan sponsors representing a broad range of industries, Willis Towers Watson found that 75% of respondents made a change to their plan in the last two years and expect to make at least one change over the next two years. An additional 14% of sponsors that did not make a change over the last two years plan on making at least one change over the next two years.

Source: Napa-net.org, March 2022

The Impact of 401k Cash-Outs on Retirement Income

Due to the power of compound interest, seemingly small amounts that leak from 401k accounts when people change jobs can cause major erosion to retirement nest eggs down the line. This paper seeks to examine what people do with their 401k balances when they leave an employer and look at the demographics of people who roll in balances to their new employers.

Source: Alight.com, March 2022

ESG and Participant Communications

Many plan sponsors are at various stages of considering how to incorporate ESG into their retirement plan design and fund offerings. Plan sponsors that have incorporated ESG in their retirement plans are looking for best practices when communicating with participants about ESG. This piece is intended to provide such plan sponsors and their service providers with a framework for engaging participants on the topic of ESG and how it may be integrated into their retirement plan communications.

Source: Dciia.org, March 2022

Three Barriers to ESG Adoption for U.S. DC Plans

DCIIA's Retirement Research Center interviewed 12 defined contribution practice leaders at leading U.S. consulting firms on barriers to incorporating environmental, social and governance considerations and investments in U.S. DC plans. According to these consultants, while interest in and demand for ESG continues to grow, implementation remains challenging. This report describes the three barriers to implementation identified by U.S. consultants.

Source: Dciia.org, March 2022

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