Tens of thousands of employers in the U.S. contribute to multiemployer pension funds that are in critical and declining status, collectively facing an unfunded liability well above $100 billion; Society of Actuary researchers warn of potential ripple effects should many of their plans fail at once.
Data and Research
A mere 2.7% of Americans stopped contributing to their defined contribution plan in 2017, the ICI reports.
As skilled Baby Boomer employees begin to reach the traditional retirement age, employers need to examine their policies and procedures to address the potential loss of talented and experienced workers.
Average individual 401(k), 403(b) and IRA account balances increased year-over-year, according to the latest cut of data from Fidelity’s book of retirement business, but the average dipped slightly from Q4 2017, reflecting market volatility and the fact that new small-balance savers entered the fold.
The impact of investment of assets plus spending of pension checks by retirees in 2016 yielded a $1.3 trillion contribution to the economy and $277.6 billion to state and local revenues, according to research from NCPERS.
Eighty percent of American workers surveyed said they would like to hear congressional candidates discuss retirement security.
That is followed by not saving for an emergency, and taking on too much credit card and too much student loan debt.
“The idea that financial planning and wealth management are just for millionaires is one of the biggest misconceptions among Americans, and one of the most damaging,” warns Joe Vietri, senior vice president and head of Charles Schwab’s retail branch network.
Data from BMO GAM shows DC retirement plan fees have fallen for all sizes of plan sponsors except those with between $10 million and $50 million in assets.
Only 49% said they had read their fee disclosure in the prior year and had understood it; 44% said they had not read it; and 7% said they had read the disclosure but did not understand it.
A report suggests, “The need to maintain a sufficient allocation to stocks can be reconciled with the reticence to do so of the risk averse investor by moving a portion of the retirement portfolio into structured annuities and/or annuities with guaranteed lifetime income or withdrawal features.”
But less than half are willing to do the same for better health care benefits, Willis Towers Watson learned in a survey.
One clear point of concern in the data is the increasing number of Americans who anticipate retiring at 70 years or older than in the “traditional 65 to 69 range.”
Sixty-one percent of employers that offer financial wellness programs are satisfied with their benefits program, Prudential found.
Empower identified “habits of success” that correlate with higher projected retirement income—saving in a workplace retirement plan, saving at a higher level and having a formal plan for retirement.
A speaker at PSCA’s 71st Annual National Conference suggests reports of Americans retirement savings inadequacy are overblown and offers data to back that up.
Paying off debt is their second greatest fear, Franklin Templeton found in a survey.
The rise in lawsuits is prompting more sponsors to turn to lower-cost index funds—and could prevent them from offering lifetime income products.
While 80% of investors say their adviser discusses risk tolerance, only 50% say they bring up the subject of guaranteed lifetime income.
In addition, a CareerBuilder survey found roughly one in four workers ages 55 and older (23%) said they do not participate in a 401(k), IRA or other retirement plan.