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COLLECTED WISDOM™ on Studies and Research focused on 401k Plans

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Participants Talk Saving, Retirement Plans and Risk; Research

Plan Sponsors and their advisors consider many factors when evaluating and defining retirement plan design. One of those should be understanding participant sentiments about saving and retirement benefits. Use findings from our 8th national survey to add insight and value in your discussions and deliberations about participant behaviors and plan features.

Source: Americancentury.com, August 2020

The Economics of Providing 401k Plans: Services, Fees, and Expenses, 2019

At year-end 2019, 401k plan assets totaled $6.4 trillion, with 37 percent invested in equity mutual funds. In 2019, the average expense ratio for equity mutual funds offered in the United States was 1.24 percent. 401k plan participants who invested in equity mutual funds, however, paid about one-third of that amount -- 0.39 percent -- on average. The expense ratios that 401k plan participants incur for investing in mutual funds have declined substantially since 2000. This is a 32-page report.

Source: Ici.org, July 2020

Initial Impacts of Coronavirus on Global Defined Contribution Plans

This 6-page report provides a snapshot of initial policy responses related to participant access to DC plans in various global markets as of May 15, 2020. For context, while the coronavirus pandemic has affected 188 countries, the timing and intensity of the pandemic has varied significantly across the world. Country practices and retirement plan systems vary globally. As such, a country's policy decision may not only reflect their stance towards DC plan assets but also whether the country has a robust safety net or other significant sources of guaranteed income.

Source: Dciia.org, July 2020

Bridging the Gap Between Accumulation and Decumulation for Participants

Defined contribution plan participants are increasingly keeping retirement balances in the plan, and a growing number of plan sponsors are interested in retaining these balances. Information gleaned from focus groups suggests that participants have misperceptions about the value of staying in plan. Some participants do not even know that staying in a plan is an option after retirement. If plan sponsors want to maintain retirees in the plan, they should not keep it a secret. They must engage with participants early and often.

Source: Troweprice.com, June 2020

How Exposed Are Retirement Savings to Market Risk?

As the COVID-19 pandemic emerged in early 2020, the stock market declined by 35 percent between its February peak and March trough. While the market has largely recovered since then, it remains very volatile and exposes household savings to continued market risk. This 10-page paper documents where the declines occurred and the extent to which retirement accounts are exposed to equity market risk. The first section looks at overall trends in the stock market and household exposure. The second section breaks down the decline in equity values by source. And the third section focuses specifically on retirement assets.

Source: Bc.edu, June 2020

Decoding Retirement: A Detailed Look at Retirement Distributions Reported on Tax Returns

This 83-page paper addresses the question of how leakage should be defined when using tax data. The analysis indicates that penalized distributions, which represent only about half of the taxable distributions received by individuals younger than 55, are a reasonable approximation for leakage. The paper also examines retirement distributions more generally, looking across all age groups.

Source: Irs.gov, June 2020

Retirement Security for Women Amid COVID-19

A woman's path to a secure retirement is filled with obstacles. Amid the COVID-19 pandemic, the challenges faced by women have further intensified with layoffs, furloughs, or extended periods working from home and balancing job responsibilities with homeschooling children and, possibly, caregiving for an aging parent or loved one. The goal of this research is two-fold: 1) to raise awareness of the retirement risks that women face, and 2) to highlight opportunities for women to take greater control of their finances and their futures.

Source: Transamericacenter.org, June 2020

Who Participates in Retirement Plans, 2017

Increasing the share of workers who participate in retirement plans has been a primary focus of retirement policy. As the retirement industry and policymakers try to increase participation, it is important to understand which workers currently participate in employer-sponsored retirement plans and why certain employers offer, and certain employees desire, compensation in the form of retirement benefits. This 32-page report uses tabulations of administrative tax data published by the IRS to analyze participation in employer-sponsored retirement plans.

Source: Ici.org, May 2020

Defined Contribution Plan Participants' Activities, 2019

Defined contribution plan assets are a significant component of Americans' retirement assets, representing more than one-quarter of the total retirement market and about one-tenth of US households' aggregate financial assets at year-end 2019. This 16-page report updates the results from ICI's survey of a cross-section of recordkeeping firms representing a broad range of DC plans and covering more than 30 million employer-based DC retirement plan participant accounts as of December 2019. The broad scope of the recordkeeper survey provides valuable insights about recent withdrawal, contribution, asset allocation, and loan decisions of participants in these plans.

Source: Ici.org, May 2020

Implementation of Auto Features Continues to Rise as Plans Recognize Benefits, Survey

The survey, conducted by DCIIA's Retirement Research Center, represents the views of 175 defined contribution plan sponsors and is based on year-end 2018 data. Fifty-seven percent of the respondents represent plans with assets greater than $200 million. The remaining 43% of respondents have less than $200 million in plan assets. This report offers observations relative to prior survey findings, where applicable, and provides historical perspectives on how sponsor behaviors and attitudes towards auto features have developed over time.

Source: Dciia.org, April 2020

A Close Look at ERISA 403b Plans, 2016

The study of 403b plans is complicated because plan sponsors span public and private sectors; also, some plans are subject to ERISA and some are not. ERISA 403b plan assets account for nearly half of the estimated total 403b plan assets. This 68-page report analyzes 403b plans covered by ERISA that also file Form 5500 Schedule H in 2016.

Source: Ici.org, April 2020

Achieving Retirement Equality for Women

With the dawn of a new decade, this 52-page report looks at steps women can take to improve their retirement preparedness. The report also sets forward recommendations for employers and governments globally to take an active approach in reducing the retirement preparedness gender gap, paving the way to a more equal future retirement landscape.

Source: Aegon.com, February 2020

From Traditional to Transitional: How the Nation's Retirement Model Is Changing

Nearly six in 10 employers (57 percent) believe that within the next five years their workers will retire at older ages than today. For many, the very definition of retirement is changing, as bridge jobs, gig work and encore careers replace the traditional notion of a fixed end to one's working life. Those are just a few of the findings from MetLife's new Evolving Retirement Model Study. It finds the traditional model of retirement -- which assumed a fixed career end date and employer-paid benefits -- is being replaced by a more transitional model.

Source: Metlife.com, February 2020

Rethink, Rewire, Retire; White Paper

We all know what "retirees" look like: the silver-haired couple strolling on the beach, teeing off on the links or building a birdhouse with the grandkids. But these conventional images of retirement, seen in countless financial-planning brochures, are fast joining the rocking chair in the museum of retirement cliches, along with traditional approaches to retirement planning. This 14-page survey suggests financial advisors and retirement plan sponsors can help consumers redefine retirement with new, engaging planning tools and investment products.

Source: Empower-Retirement.com, February 2020

American Views on Defined Contribution Plan Saving, 2019

The survey polled respondents about their views on DC retirement account saving and their confidence in 401k and other DC plan accounts. Survey responses indicated that Americans value the discipline and investment opportunity that 401k plans represent and that individuals were largely opposed to changing the tax preferences or investment control in those accounts. A majority of respondents also affirmed a preference for control of their retirement accounts and opposed proposals to require retirement accounts to be converted into a fair contract promising them income for life from either the government or an insurance company.

Source: Ici.org, January 2020

401k Plan Participants Report More Confidence

Individuals who participate in 401k plans are more confident about their retirement than those who do not participate, according to a recent study focused on financial attitudes and behaviors conducted by T. Rowe Price. The study found that, regardless of income and assets, pre-retirees aged 50 and older who participate in a 401k plan are 16% more likely to be confident about their retirement than those who do not participate.

Source: Troweprice.com, January 2020

From Saving to Income: The Next Evolution of Defined Contribution Plans

The last two years have seen a surge in the adoption of financial wellness programs by employers eager to help employees improve their financial wellbeing. But many employers have yet to evolve one of their core employee benefit -- their retirement savings plan -- to help workers address their greatest financial wellness challenge: generating an adequate and sustainable amount of lifetime income in retirement. While retirement savings plans have undergone two significant evolutions over the last four decades, they still fall short in providing workers with lifetime retirement security. This is an important gap now that DC plans generally are a primary source of participants' retirement income.

Source: Prudential.com, January 2020

Millennial Retirement Report: Time Is on Their Side, but the Clock Is Ticking

Millennials' retirement expectations are similar to previous generations: they hope to retire with adequate income that will last. However, this report by the Insured Retirement Institute finds that these expectations are not well aligned with the retirement planning steps millennials have taken thus far.

Source: Myirionline.org, January 2020

Optimal Default Retirement Saving Policies: Theory and Evidence From OregonSaves

This paper provides an analysis of state-sponsored auto-enrollment plans, and specifically, the plan's default contribution rate. It develops a tractable framework to derive the optimal default contribution rate considering workers' decisions on adhering to the default contribution rate. It suggests the optimal default contribution rate to be 8%.

Source: Upenn.edu, January 2020

What if OregonSaves Went National: A Look at the Impact on Retirement Income Adequacy

With more than a year of experience with the OregonSaves plan, the Employee Benefit Research Institute asked the question: What if OregonSaves were a national program? How would that impact the retirement security of American workers? They further asked how a national version of OregonSaves would compare with nationwide implementation of 401k safe harbor plans among employers who do not currently offer a DB or DC plan. They examined both using EBRI's Retirement Security Projection Model.

Source: Ssrn.com, December 2019

Transamerica Retirement Survey: A Compendium of Findings About U.S. Workers

The Compendium provides in-depth perspectives on retirement. This 222-page report offers 30+ key indicators of retirement readiness, preparations and attitudes among workers by employment status (full-time, part-time), generation, gender, household income, level of education, and race/ethnicity.

Source: Transamericacenter.org, December 2019

Defined Contribution Plan Participants' Activities, First Half 2019

Defined contribution plan assets are a significant component of Americans' retirement assets, representing 28 percent of the total retirement market and almost one-tenth of US households' aggregate financial assets at the end of the second quarter of 2019. To measure participant-directed changes in DC plans, ICI has been tracking participant activity through recordkeeper surveys since 2008. This 16-page report updates results from ICI's survey of a cross section of recordkeeping firms representing a broad range of DC plans and covering more than 30 million employer-based DC retirement plan participant accounts as of June 2019.

Source: Ici.org, December 2019

2020 403b Plan Priorities

The Plan Sponsor Council of America conducted a survey of 403b plan sponsors in October 2019 to determine their priories for their retirement plan in 2020. The survey also assessed what changes are planned in 2020 to address those priorities. Nearly three hundred 403b plan sponsors responded to the survey, representing a diverse group of organizations. This is the 15-page report on the survey results.

Source: Psca.org, December 2019

Deloitte Defined Contribution Benchmarking Survey

In the era of 100-year lives and with the workforce participation rate among those age 65 or older surpassing 20 percent for the first time in more than 50 years, Americans' notion of "normal retirement" is changing. Deloitte's biennial Defined Contribution Benchmarking Survey shows how plan sponsors are working to address increasingly diverse retirement needs.

Source: Deloitte.com, December 2019

Missing Voices: What 401k Borrowers Can Add to the Loan Conversation

How do participants feel about loans, how are they using them, and how are participants affected by plan sponsor decisions related to the loan feature? Addressing the "voice of the participant" -- and what we can learn from these voices -- is the purpose of this 16-page report.

Source: Loaneraser.com, December 2019

Facts About Women's Retirement Outlook

Today's women are better educated and enjoy career opportunities that were unimaginable 50 years ago. Despite this progress, women continue to lag behind men in terms of saving and planning for retirement. A woman's path to a secure retirement is filled with obstacles, such as lower pay and time out of the workforce for parenting or caregiving, which can negatively impact her long-term financial situation. The goal of this research is two-fold: 1) to raise awareness of the retirement risks that women are facing, and 2) highlight opportunities for women to take greater control of their finances and their future.

Source: Transamericacenter.org, November 2019

How Core Investment Menu Size Impacts Participant Investment Decisions in DC Plans

Research has shown that employers' ability to automatically enroll workers into investment defaults within DC plans led to a significant increase in participation rates and a reduction in self-directing participants. However, many studies that plan sponsors, consultants, and investment advisors use to identify best practices for participants were conducted prior to the introduction of the PPA. The potential impact of smaller core investment menus may not have the same effect when most participants are ending up in the default-investment option today. The paper explores the relation between core investment menu size and two key participant investment decisions: the acceptance of the plan's default-investment option, and the efficiency of portfolios among participants who were self-directing their accounts.

Source: Morningstar.com, November 2019

Why Are 401k/IRA Balances Substantially Below Potential?

Most workers have 401k/IRA balances at retirement that are substantially below their potential. This 7-page paper explores the reasons for this gap between potential and actual balances. For workers to accumulate substantial retirement savings, they must contribute regularly, keep their money in the account, and maximize after-fee returns. Four aspects of the U.S. retirement system make it difficult to achieve these goals.

Source: Bc.edu, November 2019

How Would 401k "Rothification" Alter Saving, Retirement Security, and Inequality?

This 38-page paper develops a dynamic life cycle model to show how and whether "Rothification" -- that is, taxing 401k contributions rather than payouts -- would alter household saving, investment, and Social Security claiming patterns. The paper shows that these changes differ importantly for low- versus higher-paid workers. It concludes that moving to a system that taxes pension contributions instead of withdrawals will lead to later retirement ages, particularly for the better-educated. It also would reduce work hours and lifetime tax payments and increase wealth and consumption inequality.

Source: Upenn.edu, October 2019

2019 Participant Survey

Participants provide valuable insights for plan sponsors. The 2019 PLANSPONSOR Participant Survey found that a retirement plan's initial automatic deferral rate plays an important role in what employees save. Twenty-eight percent of plan participants said they accepted the default deferral rate. Perhaps because that rate is typically low, 41% of respondents save 5% or less -- a more sizable group than the 34% last year and 35% in 2017.

Source: Plansponsor.com, October 2019

Long-Term Value Creation in US Retirement

Retirement is and will continue to be one of the largest growth opportunities for wealth managers, insurers, and asset managers. Recent estimates by the McKinsey Global Institute show retiring and elderly individuals in the developed world will contribute more to global consumption growth through 2030 than will Chinese consumers aged 15 to 59. Not surprisingly, leading firms from across the financial services industries are seeking to tap into this long-term growth opportunity. A 11-page report.

Source: Mckinsey.com, August 2019

Who Participates in Retirement Plans

Increasing the share of workers who participate in retirement plans has been a primary focus of retirement policy. As the retirement industry and policymakers try to increase participation, it is important to understand which workers currently participate in employer sponsored retirement plans and why certain employers offer, and certain employees desire, compensation in the form of retirement benefits. This 32-page report uses newly available data -- tabulations of administrative tax data published by the IRS Statistics of Income Division -- to analyze participation in employer-sponsored retirement plans.

Source: Ici.org, August 2019

The Self-Employed Are Defying Retirement While Overlooking Essential Preparations

Only 26 percent of the self-employed are "very much" looking forward to retirement according to findings from Self-Employed: Defying and Redefining Retirement, a new study released today by nonprofit Transamerica Center for Retirement Studies. The self-employed are enjoying life. Given the autonomy and flexibility in their work situations, the concept of retirement is less relevant to them and not necessarily something they aspire to. The survey of 755 respondents explores the retirement outlook of individuals who are primarily self-employed.

Source: Transamericacenter.org, July 2019

Reducing Regulatory Obstacles to Annuities in 401k Plans

Retirees with defined contribution plans face a key dilemma: how and when to convert their retirement savings into income in a way that minimizes the risk of outliving their assets without unnecessarily sacrificing their standard of living. Annuities offer one way to resolve this dilemma. This 41-page paper explores legislative and regulatory reforms that could encourage workers to annuitize more of their 401k and other defined contribution balances upon retirement. It proposes changes that would create an appropriately protective fiduciary safe harbor for plan sponsors selecting annuity providers, increase the portability of annuities, and reform the required minimum distribution rules relating to retirement income.

Source: Brookings.edu, July 2019

How America Saves: Small Business Edition

Vanguard issued its sixth annual "How America Saves: Small Business Edition," a comprehensive assessment of plan design trends and participant savings behavior in small business 401k plans. The new research finds that small business plan participants are benefiting from enhanced plan design features, including professionally managed allocations, which have led to increased plan participation and optimized portfolio construction. Report is 36-pages.

Source: Vanguard.com, July 2019

The Economics of Providing 401k Plans: Services, Fees, and Expenses, 2018

401k plan participants investing in mutual funds tend to hold lower-cost funds. At year-end 2018, 401k plan assets totaled $5.2 trillion, with 37 percent invested in equity mutual funds. In 2018, the average expense ratio for equity mutual funds offered in the United States was 1.26 percent. 401k plan participants who invested in equity mutual funds, however, paid about one-third of that amount -- 0.41 percent -- on average. The expense ratios that 401k plan participants incur for investing in mutual funds have declined substantially since 2000. This is a 34-page report.

Source: Ici.org, July 2019

Stable Value White Paper

This 25-page paper is written specifically for fiduciary advisors and is intended to give a basic overview of different types of stable value products, how to evaluate their key features and what to look out for so a fiduciary advisor can feel confident making specific, due diligent recommendations about stable value products to their clients.

Source: Fi360.com, June 2019

How America Saves 2019

The 18th edition of "How America Saves" delivers a 121-page comprehensive analysis of the retirement savings behavior of 5 million participants in about 1,900 defined contribution retirement plans for which Vanguard provides recordkeeping services. Our data-rich report examines trends in how participants accumulate, manage, and access retirement savings.

Source: Vanguard.com, June 2019

2019 401k Participant Survey

New research from Schwab Retirement Plan Services finds that although 401k participants believe they need $1.7 million, on average, to retire, many are not investing enough to reach that goal. The nationwide survey of 1,000 401k plan participants also reveals the outsized role of the 401k in Americans' financial lives, with most saying it is their only or largest source of retirement savings.

Source: Schwab.com, June 2019

The Cobbler's Shoes: How Asset Managers Run Their Own 401k Plans

Callan analyzed the practices of asset managers in running their own 401k plans, using U.S. Department of Labor data from 2016 and comparing that dataset to a broader population of 55,000 plans. The 26-page analysis shed light on how the investment management industry, the ultimate stewards of 401k plans, performed on the key issues of participant behavior and investment design in the plans for its own employees.

Source: Callan.com, May 2019

Sustainable Investing in Defined Contribution Plans

The recent series of bulletins on ESG-related investing issued by the DOL has led to confusion due to a lack of clarity in the language and an inconsistent tone over the course of different administrations. This 8-page paper seeks to provide plan sponsors with a base level of knowledge about sustainable investing and integration, by providing clarification on terminology and focusing on areas that historically have been misperceived.

Source: Dciia.org, May 2019

401k Loan Usage Reaches Nine-Year Low: Study

The use of 401k loans reached a nine-year low of 22.5% in 2018, and continued a steady six-year decline of nearly 10%, according to T. Rowe Price's annual participant data benchmarking report, Reference Point. The report also found that the percentage of participants who took a hardship withdrawal fell for the ninth consecutive year, declining from 1.9% in 2010 to 1.3% in 2018. Meanwhile, both loan balances and the average amount of hardship withdrawals increased.

Source: Troweprice.com, April 2019

Investment Committees: More Than the Sum of Their Parts

Why do some committees generate better investment outcomes than others? Is it because they are just better investors, or are there group dynamics at work that can systematically rob a committee of its ability to make strong decisions? This 25-page paper outlines some fundamentals of building a strong team and maintaining a structure that supports thoughtful decision-making. It also addresses the pitfalls that groups can fall prey to, with a discussion of group dynamics and behavioral economics heuristics that can become issues for investment committees if members are not aware of them.

Source: Arnerichmassena.com, April 2019

19th Annual Transamerica Retirement Survey Released

The latest research findings from TCRS based on its 2018 survey of American workers. The Annual Transamerica Retirement Survey explores attitudes about retirement and retirement readiness among American workers. What Is "Retirement"? Three Generations Prepare for Older Age highlights differences and similarities among Baby Boomers, Generation X and Millennials.

Source: Transamericacenter.org, April 2019

Distributions From DC Plans

With an increased focus on retirement income, employers are now turning their attention to how their workers are using their defined contribution plan assets after terminating employment. To help organizations better evaluate the distribution decisions people make when they leave employment, Alight Solutions analyzed the post-termination behavior of more than 2 million DC participants from 2008 - 2017.

Source: Alight.com, March 2019

DC Plan Participants' Activities, First Three Quarters of 2018

This 14-page report updates results from ICI's survey of a cross section of recordkeeping firms representing a broad range of DC plans and covering more than 30 million employer-based DC retirement plan participant accounts as of September 2018. The broad scope of the recordkeeper survey provides valuable insights about recent withdrawal, contribution, asset allocation, and loan decisions of participants in DC plans.

Source: Ici.org, February 2019

American Views on Defined Contribution Plan Saving, 2018

This report presents survey results that reflect individuals’ responses collected during December 2018. The survey polled respondents about their views on DC retirement account saving and their confidence in 401k and other DC plan accounts. Survey responses indicated that Americans value the discipline and investment opportunity that 401k plans represent and that individuals were largely opposed to changing the tax preferences or investment control in those accounts. A majority of respondents also affirmed a preference for control of their retirement accounts and opposed proposals to require retirement accounts to be converted into a fair contract promising them income for life from either the government or an insurance company.

Source: Ici.org, February 2019

2019 Hot Topics in Retirement and Financial Wellbeing

The 32-page 2019 Hot Topics in Retirement and Financial Wellbeing report is based on an annual survey that Alight Solutions administers to employers in an effort to capture the changes they intend to make to their retirement and financial wellbeing plans in the year ahead. The 2019 version is the 15th installment of the report and comes from the responses of nearly 175 organizations that employ 7.6 million workers. The survey was administered in the fall of 2018.

Source: Alight.com, January 2019

403b Plan Snapshot Survey

Plan sponsors are changing key governance practices to improve 403b plan performance and outcomes for employees, according to new findings from the latest Plan Sponsor Council of America survey report. The 13-page report highlights that changes are largely in response to litigation surrounding plans, the need to mitigate risk, recommendations from their advisor, and the normal course of plan governance.

Source: Psca.org, December 2018

Demand for Financial Advice Increases; Retirement Advice Needed Most of All

The demand for financial advice has increased among individuals' major or minor financial objectives, according to this 42-page study of current workers recently conducted by T. Rowe Price. The three of the most cited objectives for which respondents identified a need for advice were related to retirement: saving for retirement outside of your workplace plan (74 percent), saving to fund health care expenses in retirement (74 percent), and saving for retirement through current workplace plans (71 percent).

Source: Troweprice.com, December 2018

The Winding Road to Retirement - Financial Stress Survey

John Hancock announced the results of its annual Financial Stress Survey of 1,352 retirement plan participants, revealing a majority of workers (69 percent) are stressed over their finances, costing companies approximately $2,000 per employee. Most respondents (72 percent) admitted to worrying about personal finances while at work, with one-third doing so more than once per week.

Source: Jhrps.com, December 2018

PSCA Publishes 61st Annual Survey of Profit Sharing and 401k Plans

As the 401k commemorates its 40th anniversary, new research from the Plan Sponsor of America finds that employers are contributing an average of 5.1 percent of pay to their employees' 401k accounts, the highest ever recorded in the history of the survey, the longest running of its kind. This rate of contribution, combined with an average savings rate by participants of 7.1 percent, gives a total savings rate of more than 12 percent.

Source: 401khelpcenter.com, December 2018

Taxpayers Generally Comply With Annual Contribution Limits for 401k Plans; Additional Efforts Could Further Improve Compliance

Analysis of IRS records showed that the vast majority of taxpayers are complying with tax laws designed to limit the annual amount of compensation that can be contributed to 401k retirement plans. Nonetheless, two areas in which compliance could be improved were identified: 1) some 401k plans did not prevent taxpayers from exceeding the annual limit, and 2) some taxpayers exceed annual limits when contributing to multiple 401k plans.

Source: Oversight.gov, November 2018

Biennial Study on the American Retirement Experience

The goal of this 23-page study is to examine the retirement experience of individuals who have been living in retirement for a meaningful amount of time, and develop a deeper understanding of the underpinnings of their retirement security: the risks they have encountered, are worried about, and may face; how well they have prepared, and where their preparations are weak; and finally, how their experience can help guide the preparations of future generations of retirees.

Source: Myirionline.org, November 2018

What Does Consistent Participation in 401k Plans Generate?

This 24-page paper provides an annual 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). Key findings are detailed.

Source: Ici.org, November 2018

Strong Market Returns Fail to Reduce Workers' Financial Stress

After two years of strong stock market returns, people are significantly more likely to say they are in excellent financial health and ahead of schedule in saving for retirement than they were in 2016. Despite this optimism, however, they also report significantly more stress, especially financially related stress, driven primarily by growing debt. Savings-related benefits like 401ks and health savings accounts help employees feel better about their financial well-being, but the data indicate many either do not fully understand the benefit or have overestimated their success using it.

Source: Lockton.com, October 2018

Perspectives to Help Drive Better Retirement Outcomes

This 44-page report draws on data about the behaviors of more than four million retirement plan eligible employees. This analysis, in conjunction with key findings from the behavioral finance field, provides useful guidance for how plan sponsors can be effective in helping their employees achieve a more successful retirement.

Source: Wellsfargomedia.com, October 2018

Millennial Self-Directed 401k Investors Allocate More to ETFs Than Do Other Generations

According to Charles Schwab's 10-page SDBA Indicators ReportTM Millennials allocated a larger percentage of their portfolios to ETFs and cash than did other generations during the second quarter of 2018, while mutual funds remained the largest holding in the accounts of all generations.

Source: Schwab.com, September 2018

Approaching the Decumulation Phase of Retirement

This 21-page white paper examines trends and the latest studies regarding how retirees spend their savings, and offers suggestions and analysis on potential strategies.

Source: Pentegra.com, September 2018

Annual 403b Retirement Plan Survey: Organizations Adopting Best Practice Plan Designs

Organizations that sponsor 403b plans are accelerating adoption of plan automatic features to improve plan design and participant outcomes, according to the 2018 403b Plan Survey from the Plan Sponsor Council of America. The report also confirms more organizations are working with advisors. This year marks the 10th year of the survey and significant trends have emerged over that period.

Source: Psca.org, September 2018

Target-Date Funds Widely Used by Younger Plan Participants

Younger 401k plan participants have large allocations to target-date and other types of balanced funds, according to a new joint study released today by the Investment Company Institute and the Employee Benefit Research Institute. At year-end 2016, 64 percent of 401k participants in their twenties held target-date funds, compared with 45 percent of 401k participants in their sixties.

Source: Ebri.org, September 2018

401k Plan Asset Allocation, Account Balances, and Loan Activity in 2016

EBRI and ICI released "401k Plan Asset Allocation, Account Balances, and Loan Activity in 2016." Since 1996, the Employee Benefit Research Institute and the Investment Company Institute have worked together on collecting and analyzing annual data on millions of 401k plan participants' accounts. This report reflects the year-end 2016 update of these data and EBRI's and ICI's ongoing research into 401k plan participants' activity.

Source: Ebri.org, September 2018

Understanding and Achieving Participant Financial Wellness

This survey of retirement plan participants was conducted to better understand participant financial wellness and factors that contribute to -- or impede -- the ability to become financially well. A total of 12,211 retirement plan participants answered questions about financial wellness, ancillary wellness factors -- such as working with financial professionals -- and education preferences. Report is 12-pages.

Source: Oneamerica.com, August 2018

2018 401k Participant Survey

This online survey of 1,000 401k participants was conducted by Logica Research for Schwab Retirement Plan Services. Survey finds that while American workers are proactive about reaching retirement goals, they could benefit from professional financial help.

Source: Schwab.com, August 2018

Striking Similarities and Disconcerting Disconnects: Employers, Workers and Retirement Security

A new study from nonprofit Transamerica Center for Retirement Studies revealed only 16 percent of employers are "very confident" that their employees will be able to achieve a financially secure retirement. The study also illustrates ways that employers are out of sync with workers regarding perceptions and business practices related to older workers and it examines the current state of 401ks and other benefit offerings by company size.

Source: Transamericacenter.org, August 2018

Demographic Differences in the Language and Imagery of Retirement

This empirical study was conducted to understand people's perspectives toward retirement and to describe how views differ between people of various characteristics. Using the results of this analysis, financial planners can better address clients' emotional needs, rather than solely focusing on rational financial planning.

Source: Onefpa.org, August 2018

Potential vs. Realized Savings Under Automatic Enrollment

While automatic enrollment in employer retirement plans has been shown to vastly increase plan participation, many employees tend to withdraw some or all of their account balances before retirement – offsetting automatic enrollment’s positive effect. This study gauges how automatic enrollment influenced savings plan loans and withdrawals at a Fortune 500 financial services firm and how pre-retirement withdrawals affected employees’ retirement plan balances over time.

Source: Tiaainstitute.org, July 2018

How America Saves 2018: Small Business Edition

Small businesses account for 99.7% of all employer firms and more than half of all private-sector employees, according to the Small Business Administration. So how are small businesses preparing their employees enrolled in defined contribution plans for retirement? And how effectively are small-business employees using this benefit? Vanguard addresses questions surrounding small-business retirement behavior in this research.

Source: Vanguard.com, July 2018

2018 RIA Benchmarking Study

The 2018 RIA Benchmarking Study by Charles Schwab is the leading study of its kind in the RIA industry. The Study features insights based on self-reported information on topics such as asset and revenue growth, sources of new clients, products and pricing, staffing, compensation, marketing, technology, and financial performance.

Source: Aboutschwab.com, July 2018

2018 Retirement Preparedness Study

Many retirees are enjoying a secure retirement, but many pre-retirees envision that the "dream retirement" is becoming more elusive. This study explores how well individuals are preparing for retirement and how they are responding to the challenges they face.

Source: Pgim.com, July 2018

T. Rowe Price 10th Annual Reference Point Benchmarking Report

T. Rowe Price has released their 10th annual Reference Point benchmarking report (55-pages) of employer-sponsored retirement plans, which is based on the firm's full-service recordkeeping client data for 2017.

Source: Troweprice.com, July 2018

Less Is Not More: Information Presentation Complexity and 401k Planning Choices

This 40-page paper presents the results of an experiment that is designed to examine how information presentation and complexity impact retirement-savings behavior. The hypothesis is that providing concise information with helpful recommendations would improve choices over providing lengthy and detailed information. However, the data suggest that simplifying the presentation of 401k plan information to employees is unlikely to result in vastly improved retirement-planning choices.

Source: Iza.org, July 2018

Rethinking Millennial Retirement: Policy Recommendations for a Gig Economy

This 43-page policy proposal is made up of three parts: The Multiple Employer Plan IRA, an expansion of the Saver’s Credit, and retirement planning resources and courses for college students. Millennials face a myriad of challenges in saving for retirement. The paper discusses the pressure that Social Security faces in coming years, important factors contributing to the current state of millennial retirement, how the gig economy prevents accessibility to tax-advantaged retirement plans, and past efforts to reform the way Americans save for retirement.

Source: Wiserwomen.org, June 2018

The Economics of Providing 401k Plans: Services, Fees, and Expenses, 2017

Maintaining a 401k plan involves a variety of services, and the costs of these services are generally shared by the plan sponsor and the plan participants. This 32-page report, published in June, 2018, looks at the economics of providing 401k plans including services, fees, and expenses.

Source: Ici.org, June 2018

More 401k Savers Go All-In on TDFs

The data are in, and they tell a powerful story about the state of retirement in America. The 17th edition of How America Saves delves into the retirement savings behavior of 4.6 million participants in defined contribution (DC) retirement plans for which Vanguard provides recordkeeping services. Our data-rich report examines trends in how participants accumulate, manage, and access retirement savings.

Source: Vanguard.com, June 2018

The New Social Contract: A Blueprint for Retirement in the 21st Century

The new research contains in-depth analysis, country comparisons, case studies, and detailed recommendations. It is based on findings from an online survey of 16,000 workers and retirees in 15 countries spanning the Americas, Europe, Asia, and Australia. Taken as a whole, the conclusions represent a compelling call to action. It is now time for a new social contract; one in which we don't only take stock of the change taking place around us today, but we also embrace the economic and social realities of tomorrow.

Source: Aegon.com, May 2018

MassMutual Asian American Retirement Risk Study

Asian Americans are more concerned about making missteps with their retirement savings in the years just before and just after retirement, yet are more confident and focused about their investments than other retirees and pre-retirees, this new research from MassMutual finds.

Source: Massmutual.com, May 2018

GAO Report on ESG Investing

ESG factors have emerged as a way for investors, such as retirement plans, to capture information on potential risks and opportunities that may otherwise not be considered. For example, climate change is expected to have widespread impacts according to a key federal study and may pose significant financial risks for long term investors, such as retirement plans that must manage risk to provide benefits for many years to come. Given the emerging use of ESG factors, GAO was asked to examine how such factors are used by retirement plans in the United States and other countries.

Source: Gao.gov, May 2018

Research Shows Gig Economy May Replace Retirement

For many survey respondents, the gig economy is replacing how they plan to earn income in retirement: 16 percent plan on having gig economy jobs to supplement their retirement; 12 percent of side-hustlers will keep a side-gig job as their main source of income after retiring from their traditional career; and, one in five full-time giggers say they'll continue to pick up incremental work in the gig economy as their main source of income following "retirement."

Source: Betterment.com, May 2018

Defined Contribution Plan Participants' Activities, 2017

This report updates results from ICI's survey of a cross section of recordkeeping firms representing a broad range of DC plans and covering more than 30 million employer-based DC retirement plan participant accounts as of December 2017. The broad scope of the recordkeeper survey provides valuable insights about recent withdrawal, contribution, asset allocation, and loan decisions of participants in these plans.

Source: Ici.org, May 2018

2018 RCS: Retiree Confidence in Critical Aspects of Retirement Security Declines

This year's Retirement Confidence Survey finds only a third of retirees very confident in their ability to live comfortably throughout retirement. While this is comparable to last year, retiree confidence in having enough money to cover basic expenses and medical expenses has dropped: 80 percent say they are very/somewhat confident about covering basic expenses this year compared to 85 percent in 2017; and 70 percent say they are very/somewhat confident about covering medical expenses this year vs. 77 percent in 2017.

Source: Ebri.org, April 2018

Defined Contribution Consulting Support and Trends Survey

PIMCO asked the nation's top retirement consultants: How can defined contribution plan participants and sponsors achieve financial security over the long haul? Download the 24-page report here.

Source: Pimco.com, April 2018

Who Participates in Retirement Plans

Increasing the share of workers who participate in retirement plans has been a primary focus of retirement policy. As the retirement industry and policymakers try to increase participation, it is important to understand which workers currently participate in employer-sponsored retirement plans and why certain employers offer, and certain employees desire, compensation in the form of retirement benefits. This 32-page report uses newly available 2014 data to analyze participation in employer-sponsored retirement plans.

Source: Ici.org, April 2018

Boomer Expectations for Retirement - 2018 Study

Baby boomers -- even the youngest of whom are just a decade or so away from retirement age -- are in large measure unprepared for retirement, having failed both to plan adequately and save enough, according to this 26-page study released by the Insured Retirement Institute.

Source: Myirionline.org, April 2018

An Analysis of Retirement Models to Improve Portability and Coverage

To better understand the portability and coverage challenges of the 401k system and to assess possible strategies to improve it, this report presents a three-part analysis. The objective of the report is to assess and present a wide range of available options by examining and summarizing existing proposals and, where relevant, examples from other countries.

Source: Bc.edu, April 2018

Study Finds Fewer GenXers Have Retirement Savings

With only ten years until the eldest of the cohort turn 65, the majority GenXers believe their savings will cover their basic expenses and allow for leisure and travel in retirement. However, this confidence is misguided as forty percent of GenXers have no retirement savings, an increase of 5 percent from the previous study.

Source: Myirionline.org, March 2018

The Mobile Workforce's Missing Participant Problem

This 13-page survey on stale address records in employer-sponsored plans was conducted in collaboration with Retirement Clearinghouse. The report is the first of its kind to survey terminated participants themselves about the status of their accounts left behind in former-employer plans.

Source: Rch1.com, March 2018

Retirement Offerings in the Fortune 500: A Retrospective

The last two decades have witnessed a sweeping shift in retirement offerings from large employers. This study takes a historical look at the primary retirement plans offered by current Fortune 500 companies between 1998 and 2017, thus showing how their retirement programs have evolved over the last 20 years.

Source: Towerswatson.com, February 2018

Mechanisms Behind Retirement Saving Behavior

This TIAA Institute study identified the behaviors that influence employees' decisions regarding their retirement plans.. In opt-in plans, efforts to get employees to increase their savings above the default rate are likely to be fruitful if they focus on improving financial literacy and understanding of exponential growth. While in automatic enrollment environments, efforts targeted at procrastination tendencies are likely to be particularly effective.

Source: Tiaainstitute.org, February 2018

Workplace Retirement Plans Tend to Sharpen Focus on Financial Futures

Are those without access to an employer-sponsored plan -- those who do not participate in available plans -- preparing for retirement in other ways? Are they prioritizing retirement savings outside of the workplace? This analysis of data from a nationally representative internet survey of private sector workers shows a correlation between access to and participation in workplace-based retirement savings programs and more planning and saving.

Source: Pewtrusts.org, February 2018

DC Plans in the US and the UK: Lessons From Across the Pond

This 36-page paper addresses the differences between defined contribution plans in the US and the UK and the lessons that can be learned from these programs. The paper is a high-level overview of the legal, regulatory and policy framework governing DC plans in both jurisdictions. It provides an analysis of the shift away from defined benefit (DB) plans in the US and the UK, to the widespread use of DC plans by both countries as the primary way of providing workplace pensions.

Source: Eversheds-Sutherland.com, February 2018

'Doing Good by Investing Well' - Pension Funds and Socially Responsible Investment

This survey was conducted by Allianz Global Investors and the Centre for European Economic Research among pension experts in France, Germany, Italy, the Netherlands, Switzerland and the United Kingdom on the future of socially responsible investment in pension fund portfolios. The majority of experts surveyed believe the SRI approach will be extended to include asset classes other than equities.

Source: Ssrn.com, February 2018

Millennial Benefit Trends Report

This report provides a look at exactly how millennial job seekers prioritize the variety of employee benefits that may be offered, as well as what the best practices are for this critical stage of the job hunt. The 14-page report aims to provide a resource for employers who want to better understand what this generation wants -- the millennial mindset -- when looking for a job.

Source: Pentegra.com, February 2018

American Views on Defined Contribution Plan Saving

The survey polled respondents about their views on defined contribution (DC) retirement account saving and their confidence in 401k and other DC plan accounts. Survey responses indicated that households value the discipline and investment opportunity that 401k plans represent and that households were largely opposed to changing the tax preferences or investment control in those accounts. Report is 32 pages.

Source: Ici.org, February 2018

2018 Defined Contribution Trends

Callan conducted our 11th annual Defined Contribution Trends Survey in the fall of 2017. The survey incorporates responses from 152 plan sponsors, including both Callan clients and other organizations. This 57-page report highlights key themes and findings from 2017 and expectations for 2018.

Source: Callan.com, January 2018


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