May 10, 2010 — Sixty-eight percent of employers reported that their company allows 401(k) participants to contribute 25% or more of their earnings, according to a survey by BLR. —
Continue reading “Companies Allow Higher 401(k) Contributions” »
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?
Continue reading “Conservation of Choice: Simplifying Investment Options to Better Serve Participants” »
by joeplemon on April 12, 2010
From its high in October 2007 through its low in March 2009, the S & P Index fell nearly 57%. Many 401(k)s likewise plummeted drastically, forcing many to delay or scale back their retirements and bringing on the chorus of “failed experiment” in describing the 401(k) strategy. But is it?
Continue reading “New Study on 401(k): Failed Experiment or Solid Plan?” »
By Brett Owens
Retirement kiss
of death:”I’m from the guvmint”
And I’m here to help!”
Last week our local “Casey Research Phyle” got together at a local restaurant to banter about the usual talk you’d expect to overhear at such a place – like government confiscation of retirement plans, expatriation, wiring money to Central America, and our favorite shorting techniques – you know, the usual.
Continue reading “Why Your 401K and IRA Savings Could Soon Be a Prime Government Target” »
March 11, 2010 — The U.S. Department of Labor has obtained consent judgments providing for restitution of more than $12 million by plan officials and service providers involved with the employee stock ownership plan sponsored by The Employee Ownership Holding Co. of Stockton, California, and Fife, Washington. —
Continue reading “DoL Recovers More than $12M for Calif. Company ESOP Participants” »
March 11, 2010 — Mercer said its recent effort with Synapses Inc., a provider of personalized 401(k) education, products, and services, indicates using targeted employee communications can achieve better plan results. —
Continue reading “Targeted Communications Could Help Achieve Plan Results” »
March 10, 2010 — A Fidelity Investments study found 40% of investors working with tax advisers are now eligible for Roth IRA conversions, and more than a third (35%) are expected to complete a conversion by year-end. —
Continue reading “Tax Advisers Expect More than a Third of Clients to Convert to Roth” »
Feb 19, 2010 — Data from insurance.com suggests certain professions are more likely to have had an accident. —
Continue reading “Attorneys, Financial Professionals Top List of Worst Drivers” »
Feb 22, 2010 — The labor-force participation rate is increasing for Americans ages 55 and older as they are faced with higher health costs and economic losses, according to a study published by the Employee Benefit Research Institute (EBRI). —
Continue reading “Americans Staying in the Workforce Longer” »
Feb 22, 2010 — Once again, 401(k) participants that were inclined to rebalance their accounts tended to chase the market. —
And while it won’t come as a surprise to most advisers, according to the Hewitt 401(k) Index, transfers were strongly equity-oriented during the first half of the month (when markets were higher), with participants moving monies out of fixed income investments and into equities during 9 out of 10 days. However, as the market retreated mid-month, 401(k) participants also changed the direction of their transfers, and moved monies back into fixed income investments during 8 out of 9 days in the second half of the month.
Continue reading “Market Continues to Move Participants” »