Despite the growth in 401(k) plans, nearly half of Americans ages 56 to 62 haven’t saved enough for retirement, according to a recent Employee Benefit Research Institute analysis. Defined-contribution plans don’t reach some employees, including those working in small businesses. Even BrightScope, the relatively young defined-contribution ranking company, is only now establishing a plan.
Articles by Patty Kujawa
The financial reform law asks federal agencies to study whether stable-value funds should be classified as swaps. How they are classified could influence whether they fall under the new law’s regulatory provisions.
Mercer reports a 40 percent increase in defined-benefit participants asking for their estimated end benefit in 2009 versus 2008.
Since 2008, the number and type of collective investment trusts have proliferated. One driver: a heightened employer interest in low-cost investment options.
People who use professional help to manage their 401(k) plans get higher returns than those who try to figure it out themselves, a recent study shows.
Six months after it suspended its matching contribution to employees’ 401(k)s, Briggs & Stratton decided it was time to bring the dollars back. The company is part of a trend: Of the 293 U.S. employers that suspended matching contributions last year, 44 percent have already restored the match or intend to restore it by next year, Fidelity found.
Twenty-seven percent of employees have less than $1,000 in savings, according to the Employee Benefit Research Institute’s annual retirement survey. More than half of respondents say their total value of household savings and investments is less than $25,000. The survey results present a strong case for automatically enrolling participants in plans and automatically escalating contribution rates.
The lowest participation is by nonnative-born Hispanic workers. Employers can tackle the problem of lower minority-worker participation through automatic enrollment, automatic escalation of deferral rates and adding more sophisticated financial education.
The market plunge and boomers’ arrival at retirement age have sponsors of defined-contribution plans scrambling to get workers to save more and prevent them from staying in their jobs too long. Three major trends are on employers’ side.
In surveys last year, U.S. workers said that their retirement picture didn’t look all that great. But things may not be as bad as they thought.