Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
April 21st, 2015
Benefits & Administration
Moving the Needle on Retirement Confidence
The 25th Retirement Confidence Survey (RCS) from the Employee Benefit Research Institute (EBRI) finds Americans’ confidence in their ability to afford a comfortable retirement has continued to rebound from the record lows experienced between 2009 and 2013, but this increased level of confidence does not appear to be grounded on objectively improved retirement preparations. The increased confidence since 2013 is strongly related to retirement plan participation, the survey report says. Nevertheless, many workers say they could save a small amount more. Seven in 10 (69%) state they could save $25 a week more than they are currently saving for retirement.Read more >
Loan Policy Affects Plan Leakage
A study concludes that retirement plan loan policy is economically meaningful in shaping participant borrowing. In “Borrowing from the Future:  401(k) Plan Loans and Loan Defaults,” researchers say their administrative dataset tracks several hundred plans over five years and shows 20% of retirement plan participants borrow at any given time, and almost 40% do at some point over five years. They estimate loan default “leakage” at $6 billion annually. According to the research report, when a plan sponsor permits multiple rather than only one loan, the probability of plan borrowing nearly doubles.Read more >
Retirement Planning Should Consider the Unexpected
Sixteen percent of workers in the 2015 Retirement Confidence Survey (RCS) from the Employee Benefit Research Institute (EBRI) say the age at which they expect to retire has changed in the past year, and of those, the large majority (81%) report their expected retirement age has increased. Luke Vandermillen, vice president of retirement and investor services at The Principal, a co-sponsor of the survey, notes that workers and retirees responding to the survey say they spend little time doing retirement planning—less than they spend planning for the holidays. “This leads to misconceptions,” he tells PLANSPONSOR. “Workers think if they don’t have enough money to retire, they will just work longer or work in retirement, but sometimes people can’t retire on their own terms because of health issues or company downsizing.”Read more >
Products, Deals & People
Tonya B. Manning joined Buck Consultants at Xerox as chief actuary, a role that involves shaping and improving the firm’s understanding of current market trends.Read more >