Category Archives: Plan Education

16 Jun

Who is The New Fiduciary?

The Department of Labor’s (DoL) proposal for a new definition of fiduciary was discussed at the PLANSPONSOR National Conference—and a representative from the DoL was present to add his viewpoint.

Michael Davis, Deputy Assistant Secretary at the DoL, today began by saying how the concept of fiduciary is the core component of the Employee Retirement Income Security Act (ERISA).  ERISA was created to protect participants and their assets, he said, and the fiduciary serves as the umbrella for these protections. The original five-part test to determine if one is acting as a fiduciary (the advice is individualized, provided for a fee, provided on a regular basis, pursuant to a mutual understanding between the plan sponsor and adviser, and the advice will form the primary basis for the plan’s decision-making), is being overhauled, Davis said, to better protect plan sponsors—particularly sponsors of smaller plans.
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16 Jun

Many Employers Feel Responsible for Benefits and Advice

Slightly more than half (53%) of employers feel responsible for providing financial vehicles, as well as education and advice, to help their employees have a secure retirement, according to Bank of America Merrill Lynch.   
The Workplace Benefits Report from Bank of America Merrill Lynch examined the role of financial benefit plans in employers’ talent management strategies and in the overall financial well-being of their employees.
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11 Aug

401(k) Day 2010 is about ‘Taking You There’

The Profit Sharing/401k Council of America (PSCA) has unveiled its 2010 401(k) Day campaign with the theme of “401(k) Day… Taking You There.”

A news release said 401(k) Day is an annual comprehensive communication and education strategy campaign designed to help sponsors educate their plan participants about the many advantages of participating in an employer-sponsored defined contribution plan. Officially, PSCA said this year’s 401(k) day falls on September 10, but plan sponsors “are encouraged to celebrate any day of the year that works best for their employees.”
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27 May

Should You Adjust Your 401(k) Now?

By Brian O’Connell

Increasingly, economists and stock market pundits are sounding the alarm over an imminent bear market.

* Economist Nouriel Roubini predicts that the Dow Jones Industrial Average will fall by 20%.
* Reuter’s financial blogger Felix Salmon offers a similar warning, telling investors that unless you're a large institution, get out of the stock market right now. “Stocks are dangerous things to own,” writes Salmon. "We are entering an era of massive volatility. You, as an individual investor, just simply don't have the risk appetite to be able to deal with that kind of volatility."

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12 Apr

Conservation of Choice: Simplifying Investment Options to Better Serve Participants

Arnerich Massena & Associates, Inc.
April 2010
Contributors:
Tony Arnerich; Howard Biggs; Vincent Galindo; Jacob O’Shaughnessy, CFA; Jillian Perkins

https://www.am-a.com/company/research/wp_participantchoice.pdf

“In our last analysis, we found that between 1995 and 2006, DB [defined benefit] plans outperformed DC [defined contribution] plans by an average of 1 percentage point per year. Earlier studies also found that, over time, DB plans attained higher returns than 401(k) plans. In this year’s analysis, the results remain in line with past analyses; DB plans outperform DC plans by roughly an average of 1 percentage point a year.”
– “Defined Benefit vs. 401(k) Investment Returns: The 2006-2008 Update” Insider, Watson Wyatt Worldwide, 2009

As we watch assets in defined benefit plans decline relative to assets in defined contribution plans, it has become clear that American workers’ retirement security rests squarely on the shoulders of the employer-sponsored, participant-directed retirement savings plan. All parties in the retirement plan industry, from recordkeepers to advisers to plan sponsors, are cognizant of this and have enthusiastically worked to create a system that will result in retirement security for participants. Over the past decade, retirement plans have been the beneficiary of a variety of “improvements,” including bells and whistles of all sorts. Participants have been inundated with a growing spectrum of investment choices, reams of materials meant to educate and inform their investment choices, and advice to further guide their investment strategy.
So why is it that participant-directed accounts continue to underperform defined benefit accounts, regardless of the number and quality of investment options offered?
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10 Dec

Resolutions for 2010 Will be More Financially Focused

December 10, 2009 — A new study from Fidelity finds more Americans than in the past are resolving to save more and learn more about finances in the coming year. —

The telephone survey of more than 1,000 Americans ages 18 and older indicated that 35% typically consider New Year’s resolutions regarding their finances, but 43% of individuals said they are more likely to consider financial resolutions for the coming year. This number increases to 55% among those ages 35 to 44, Fidelity said.
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10 Nov

Text Messages Might Help People Save

November 09, 2009 — A new study in three countries found that sending a simple text message can remind individuals to save. — The study by a group of economists found that sending out text reminders to individuals’ cell phones increased savings balances by 6%. The study challenges the idea that people don’t have enough self-control to save, according to a Dow Jones news report.
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