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Nevin Adams

Nevin Adams

Nevin Adams

By Nevin Adams2/26/2013 • 1 Comments

In retirement plans, one of the more intransigent concerns for policy makers, providers, advisors and plan sponsors alike is what has been called the “annuity puzzle” — the reluctance of American workers to embrace annuities as a distribution option for their retirement savings. READ MORE

By Nevin Adams2/12/2013 • 0 Comments

“401(k) breaches undermining retirement security for millions,” read the headline of a recent article in the Washington Post. No, we’re not talking about some kind of data-hacking scandal or new identity theft breach. Rather, those “breaches” are loans and withdrawals from 401(k) plans. Providing the impetus for the article was a report by HelloWallet indicating that, “more than one in four workers dip into retirement funds to pay their mortgages, credit card debt or other bills.” READ MORE

By Nevin Adams2/5/2013 • 1 Comments

When it comes to projecting possible outcomes in situations where there might be hundreds or even thousands of different results, it’s not uncommon to pick a single point to focus on. The downside of this approach, of course, is that it overlooks what advisors all know — that there is a wide range of possible outcomes, some of which are more probable, and some less so. The alternative, stochastic modeling, doesn’t just pick a single likely result, but uses random variations to look at what a broad range of conditions might be like. READ MORE

John Carl

John Carl

By John Carl2/26/2013 • 1 Comments

In a discussion with a wholesaler for the West Coast area, the ERISA consultants at the Columbia Management Retirement Learning Center Resource Desk addressed a common question involving a company’s change in ownership and whether a distributable event for plan participants occurs as a result. READ MORE

By John Carl2/19/2013 • 1 Comments

Responding to a question from an advisor in California, the ERISA consultants at the Columbia Management Retirement Learning Center Resource Desk addressed whether it’s too late to set up a retirement plan for a business that operates on a calendar year and take a 2012 tax deduction for contributions. READ MORE

By John Carl2/12/2013 • 0 Comments

Responding to a question from an advisor in Utah, the ERISA consultants at the Columbia Management Retirement Learning Center Resource Desk recently addressed a common inquiry regarding rollovers to IRAs. READ MORE

By John Carl2/6/2013 • 2 Comments

Responding to a question from an advisor in Minnesota, the ERISA consultants at the Columbia Management Retirement Learning Center Resource Desk addressed a common inquiry regarding the definition of an active participant in an employer-sponsored plan for IRA contribution deductibility purposes if the individual receives an allocation under the 401(k) plan. READ MORE

Marcus Chandler

Marcus Chandler

Marcus Chandler

By Marcus Chandler2/14/2013 • 0 Comments

There are few certainties when it comes to prospecting for new plan business, but one of them universally holds true: If you can’t reach and speak with the decision maker(s) responsible for managing an employer’s retirement plan, you can’t win their business. Often, in the pure cold-calling, prospecting stage, the one obstacle standing in your way is the dreaded “gatekeeper.” READ MORE

Sheri Fitts

Sheri Fitts

Sheri Fitts

By Sheri Fitts2/6/2013 • 1 Comments

In the retirement plan community we all have the opportunity to make an impact in someone’s life — on a daily basis. But rarely do we have the chance to do something side by side with our colleagues and broader community. This year NAPA has codified last year’s volunteer effort at the 401(k) Summit into an annual event, where we can work side by side to create an impact for a community, family or child. READ MORE

By Sheri Fitts2/4/2013 • 3 Comments

We’ve all been to one — a presentation where the speaker has a great set of slides and is leading a highly effective and educational presentation. Unfortunately, he or she isn't engaging the audience in any meaningful way. They know they should be listening; they just don’t know why. READ MORE

Brian Graff, Esq.

Brian Graff, Esq.

Brian is the Executive Director of NAPA. In this capacity he oversees NAPA’s operations. As a member of the Leadership Council, he charts the strategic direction for the organization. Brian also serves as ASPPA’s Executive Director/CEO — a post he has held since 1996.

He has been named one of 401kWire’s “50 Most Influential Persons in the 401(k) Industry” every year since 2007.

An attorney and certified public accountant, Brian was formerly Legislation Counsel to the U.S. Congress Joint Committee on Taxation. Prior to working on Capitol Hill, he was associated with The Groom Law Group, in Washington, DC, which specializes in employee benefits. He received his doctoral degree in law, cum laude, from the University of Pennsylvania Law School in Philadelphia. He holds a bachelor of science in accounting with distinction from Cornell University in Ithaca, N.Y.

By Brian Graff, Esq.2/19/2013 • 4 Comments

The Washington Post on Feb. 17 published yet another article attacking the 401(k) system. Fueled by academic studies with a clear anti-401(k) agenda, these articles seem to revel in the entirely unsubstantiated failure of current workplace retirement plans. Not sure who is more to blame: the academics who reach the outrageous conclusions based on either irrelevant or incomplete data, or the media who perpetuate them. Either way, the anti-401(k) agenda is founded on a series of persistent myths, continued in this most recent article, that simply do not reflect the reality of America's retirement plan: the 401(k). READ MORE

Rick Meigs

Rick Meigs

By Rick Meigs2/21/2013 • 1 Comments

It’s the age-old issue of how to increase employee participation in a 401(k) plan. We know how crucial it is to the overall success of the plan – particularly to the highly compensated employee group. High participation also helps in creating a positive attitude towards the company and helps greatly in employee retention. So, how can you increase participation? READ MORE

Judy Miller

Judy Miller

By Judy Miller2/28/2013 • 2 Comments

If California’s proposed retirement savings program gets through the study stage and is actually implemented, California will have the first automatic payroll deduction IRA program in the nation. Under the program, all non-governmental California employers with five or more employees would be required to make workplace retirement savings available to employees. Workplace retirement savings could be any type of employer-sponsored program, from a DB or DC plan to an automatic payroll-deduction IRA arrangement. READ MORE

W. Michael Montgomery

W. Michael Montgomery

By W. Michael Montgomery2/21/2013 • 0 Comments

In Advisory Opinion 2012-04A, the DOL fundamentally changed the prevailing wisdom on “open” MEPs, indicating that these arrangements should be considered to be individual plans rather than a single plan having multiple adopters. In a new article, Charles G. Humphrey makes the case that the watershed DOL opinion relies too heavily on a questionable comparison with Multiple Employer Welfare Arrangements (MEWAs). READ MORE

Adam Sokolic

Adam Sokolic

By Adam Sokolic2/25/2013 • 1 Comments

According to a whole new area of science called behavioral economics, or BE — a blend of psychology, economics, finance and sociology — that could very well be. According to BE pioneer and Duke University professor Dan Ariely (author of the bestseller Predictably Irrational) and Rotman School of Management researcher Nina Mazar, our brains are hard-wired to choose short-term payoff over long-term gain. READ MORE

NAPA Net Staff

NAPA Net Staff

By NAPA Net Staff2/28/2013 • 0 Comments

In an effort to offset bailout payments, 11 European countries, including Germany and France, have enacted a new tax set to take effect next year on the sale of stocks, bonds and other investment products of European countries. READ MORE

By NAPA Net Staff2/28/2013 • 0 Comments

Thanks to our readers who participated in last week’s survey. How do you compare to your peers? READ MORE

By NAPA Net Staff2/28/2013 • 0 Comments

What’s on the minds of regulators at the IRS and SEC this year? At the IRS, 401(k) plans for sure, along with 403(b) plans — with a focus on failure to have internal controls or to follow the ones in place, according to the law firm Bryan Cave. The SEC is concerned about advisors that are part of a broker dealer they don’t own or control but also do business through an RIA they do own and control. The Commission will be reviewing what types of conflicts that business model might pose for clients. READ MORE

By NAPA Net Staff2/27/2013 • 1 Comments

A Brookings Institution report released Feb. 26 recommends curtailing the benefits for top earners to boost tax revenues. Defined contribution plans reward higher earners who would save anyway while not providing enough incentive for low and middle-income earners, according to Karen Dynan, co-director of the economic studies program at Washington-based Brookings and author of the proposal, “Better Ways to Promote Saving through the Tax System.” One proposal to cap the value of tax deferral in retirement accounts at the 28% bracket drew immediate fire from the retirement plan industry, starting with Brian Graff, Executive Director/CEO of NAPA and ASPPA. READ MORE

By NAPA Net Staff2/27/2013 • 0 Comments

Tapping experts in their fields, AdvisorOne reviewed the issues most likely to affect advisors and their clients in 2013. READ MORE

By NAPA Net Staff2/26/2013 • 0 Comments

In the last of a series of posts by speakers at the 2013 NAPA/ASPPA 401(k) Summit, March 3-5, 2013 in Las Vegas, Brodie Wood, Vice President, Transamerica Retirement Solutions, offers insights on how in the fields of health care and higher education, retirement savings plan practices and plan design are being examined as never before. READ MORE

By NAPA Net Staff2/26/2013 • 0 Comments

There was very little change in the total costs of smaller 401(k) plans in 2012, according to statistics from the 401k Averages Book. The average cost of a small retirement plan (50 participants and $2.5 million) went down less than 1%, from 147 BPs to 146 BPs. Meanwhile, larger plans (1,000 participants and $50 million) dropped almost 5%, from 108 BPs to 103 BPs. READ MORE

By NAPA Net Staff2/26/2013 • 0 Comments

On the heels of Schwab’s recent announcement touting the success of their index-only 401(k) service — which garnered $4 billion of new assets in 12 months — one blogger takes issue with some of their claims. Felix Salmon of Seeking Alpha [free registration required] points out that while index funds are generally 50 BPs lower than actively managed funds, the Schwab service includes an automatically enrolled advice service costing 45 BPs which practically wipes out any savings. READ MORE

By NAPA Net Staff2/25/2013 • 0 Comments

NAPA’s inaugural DC Fly-In Forum will be held Sept. 17-18, 2013. This invitation-only event for elite advisors will be held at the Washington Court hotel and on Capitol Hill. Note the change in date to accommodate high-ranking government speakers slated to participate in the Forum — to ensure that members of Congress and top regulators can participate, it’s critical to be in Washington while Congress is in session. READ MORE

By NAPA Net Staff2/25/2013 • 0 Comments

It looks like the so-called sequester — automatic cuts in government spending mandated by a 2011 budget compromise — is going to happen on March 1, says Brian Graff, Executive Director/CEO of NAPA and ASPPA. “It looks like there’s no way Congress and President Obama are going to come up with some kind of solution to avoid sequestration,” between now and March 1, when the sequester is set to take effect, Graff believes. For more analysis from Graff on the sequester, click on the “Washington Update” video at right. READ MORE

By NAPA Net Staff2/25/2013 • 0 Comments

ERISA budgets are all the rage, allowing plan sponsors to use profits from their providers to pay for plan expenses, including their advisors. But attorney Adam Cantor of Wolff Samson cautions that plan sponsors need to be careful creating and overseeing the ERISA budget. READ MORE

By NAPA Net Staff2/25/2013 • 0 Comments

Last week's news and commentary in the NAPA Net Daily included tips for boosting plan participation, a big jump in sales at BoA/Merrill Lynch, a new variation of TDF, four myths commonly found in media coverage of 401(k)s, the growth of hybrid advisors, what advisors can do when a client is involved in a merger or acquisition, and more. READ MORE

By NAPA Net Staff2/22/2013 • 0 Comments

Victory Capital has been sold by parent KeyCorp Bank to Crestview Partners and management for $246 million. While some banks like Bank of America are doubling down on the retirement market and seeing record sales, it seems like KeyCorp has cashed out altogether with the sale of their their DCIO firm — their final chip on the DC table. READ MORE

By NAPA Net Staff2/22/2013 • 0 Comments

Russell Investments recently announced “Adaptive Retirement Accounts,” which it heralded as the next generation of TDFs. Using data available from record keepers, Russell designs customized portfolios for participants based on age, deferral rates, salary, account balances and DB plans if applicable. They claim that this service meets QDIA requirements. READ MORE

By NAPA Net Staff2/22/2013 • 0 Comments

Charles Schwab announced the first-year results of 50 plans and 36,000 participants for their “Index Advantage” DC product. Index Advantage includes only passive mutual funds designed to lower costs, which includes third-party advice. According to the provider, costs were reduced by 77% and 90% for participants using the third-party advice, versus 4% in other plans (due to auto enrollment). READ MORE

By NAPA Net Staff2/21/2013 • 1 Comments

Fee or commission — what’s the best business model? According to research by Cerulli, it appears that the answer is “both.” The AUM of so-called “hybrid” advisors who can earn both fees and commissions grew 19.1% in 2012, while pure RIAs' AUM grew 14.7%. While the argument has raged in the DC market over the last decade, with some pundits declaring the commission-based model dead, the best answer seems to be that advisors should be flexible enough to be able to serve clients and sell products based on their needs, not on the desired business model. READ MORE

By NAPA Net Staff2/21/2013 • 0 Comments

In the latest in a series of posts by speakers at the 2013 NAPA/ASPPA 401(k) Summit, March 3-5, 2013 in Las Vegas, Laura Gaynor, Vice President, Transamerica Retirement Solutions, offers insights on how advisors can position themselves effectively for the possibility that an employer client merges or is acquired. READ MORE

By NAPA Net Staff2/21/2013 • 0 Comments

With age comes wisdom, but so does debt. According to research by LIMRA, few Gen X and Gen Y investors believe they’re very knowledgeable about making financial decisions — though more than twice as many of them who have an advisor say they’re more confident. READ MORE

By NAPA Net Staff2/19/2013 • 0 Comments

According to a recent report by Bloomberg, the Bank of America/Merrill Lynch (BoA) retirement division had a record year in 2012, led by the sale of 401(k) plans. The $24.3 billion in new sales of DB and DC last year represents a 28% increase over 2011, with 96% of the sales from 401(k)s measured by number of plans. Sales to existing bank clients more than doubled, from $5 billion to $10.6 billion. READ MORE

By NAPA Net Staff2/19/2013 • 0 Comments

In the last of three in-depth interviews with the finalists for the 2013 401(k) Advisor Leadership Award sponsored by NAPA and ASPPA, NAPA Net spoke with Michael M. Kane, founder and managing director of Plan Sponsor Consultants, about his career, his business philosophy and the practices that have made him a finalist for this year’s award. One of the three finalists will receive the award at the 2013 NAPA/ASPPA 401(k) Summit, March 4 in Las Vegas. READ MORE

By NAPA Net Staff2/19/2013 • 0 Comments

An upcoming NAPA webcast set for March 21 will provide an overview of the current use of target date funds in 401(k) plans and why the DOL and SEC are so interested in these investment alternatives. Also to be covered: what to expect from the DOL in the future, how those actions may affect retirement plan advisors, and advice on how to prepare for what lies ahead. The webcast, which is free for NAPA members, will be presented by Bradford P. Campbell of Drinker Biddle, former head of the DOL's Employee Benefits Security Administration. READ MORE

By NAPA Net Staff2/19/2013 • 0 Comments

As part of our ongoing effort to better serve the 401(k) advisor community, we’d like to gain some new insight into our readership. So we’re asking all 401(k) advisors to take a brief, one minute survey to inform us a little about your practice. All responses are anonymous, and the results will be posted on NAPA Net. READ MORE

By NAPA Net Staff2/19/2013 • 0 Comments

A Feb. 17 Washington Post article highlights the plight of Americans who are unprepared for retirement. The article enumerates several factors driving this, including social changes, the continued decline in the number of DB plans, and a stalled economy at a time when the federal government, struggling under massive debt, ponders whether it can afford to continue the estimated $80 billion tax break for retirement plans. READ MORE

By NAPA Net Staff2/19/2013 • 0 Comments

In the latest in a series of posts by speakers at the 2013 NAPA/ASPPA Summit, March 3-5, 2013 in Las Vegas, Joseph J. Masterson, Senior Vice President, Chief Marketing Officer, Transamerica Retirement Solutions, offers insights on what sponsors say they need help with and what they’re looking for in an advisor. READ MORE

By NAPA Net Staff2/19/2013 • 0 Comments

Highlights of last week's NAPA Net posts included the true costs of plan leakage, a new service that helps clients connect with prospects, an update on new NAPA Firm Partners, and Q&As with two of the three finalists for the 2013 NAPA/ASPPA 401(k) Leadership Award. READ MORE

By NAPA Net Staff2/15/2013 • 1 Comments

By John M. Miller, CFA
 
Use of “passively” managed target date funds in 401(k) plans is on the rise. Why is this? Most would suggest that the primary driver is lower fees. I tend to agree. However, fees are only one component of investment value. Risk management is another. In an investment world likely characterized by lower returns and increased volatility, the importance of risk management in achieving successful retirement outcomes will grow. 

People saving for and nearing retirement cannot afford to be blind to the dangers embedded in passive target date funds — especially the risks associated with allocations to passively managed fixed income. Keep in mind that fixed income becomes a growing part of a target date portfolio as one nears retirement. A review of publically available data for a wide variety of target data funds shows that 10 years from retirement, the average target date fund will allocate approximately 40% of its assets to fixed income; at retirement, when your account balance tends to be the largest, that figure rises to over 60%.
 
So what does this mean if you have a significant portion of your target date assets allocated to index funds investing in fixed income? Three things: low yield, risks of the index, and no active risk management. Let’s take a closer look.

Low Yield

First, prepare to accept the low yield offered by your typical index. The Federal Reserve has lowered interest rates to nearly zero and has taken additional steps to lower the yields on Treasury and mortgage bonds through massive monthly purchases. Currently, the yield on the 10-year Treasury sits at around 1.9%. Those near retirement should be rightfully concerned that such a paltry return will not keep up with the rate of inflation. 

Risks of the Index

Second, you will be exposed to the risks of the index. Interestingly, the subtle message of passive target date fund providers is that they are low risk. This is not necessarily true. Consider the way virtually every bond index is constructed: The more that a government, an agency or a company borrows, the greater weight they are given in the index. Said another way, an investor in a passively managed bond fund will have increasing exposures to those borrowers whose indebtedness is increasing and whose credit worthiness may be declining … a la Greece, Japan and now the United States. Indeed, the U.S. government has become a larger component of the Barclays Aggregate Bond over the last decade as we have increased our borrowing. Government bonds now account for nearly 45% of this index at a time when rates are at historical lows.  

No Active Risk Management

Third, investing in passively managed bond funds means no active risk management. We know that investors are concerned about rising interest rates. However, this key concern receives no attention in index funds precisely because these funds assume that the duration (interest rate risk) of the index is appropriate in all market environments. Interest rate risk, as well as many other forms of risk, needs to be actively managed.

John M. Miller, CFA


Investors in target date funds can do better than passive. In fact, they must do better, from the perspectives of both return and risk. Accepting the embedded risks of index funds is not the best choice. Part of the real and demonstrable value proposition of actively managed funds is active risk management. 
 
Actively managed fixed income funds are not likely to have the lowest fees. Look to passive funds for the lowest fees possible. But beware: You just might get what you pay for.

 

John M. Miller, CFA, is a managing director in PIMCO’s Newport Beach office, an account manager, and head of PIMCO’s U.S. retirement business. Prior to joining PIMCO in 1999, he was an officer in the U.S. Army, achieving the rank of captain. He has 14 years of investment experience and holds an MBA from Harvard Business School and an undergraduate degree from the United States Military Academy, West Point.

This article contains the current opinions of the author but not necessarily those of PIMCO. Such opinions are subject to change without notice. This article has been distributed for educational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission.

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By NAPA Net Staff2/15/2013 • 1 Comments

According to research by the Urban Institute, many plans using automatic enrollment are reducing their match to keep their costs steady. Though auto enrollment may seem like a panacea for one problem — participation rates — it’s clear that it has caused another: low deferral rates starting at 3%. The study highlights another problem: decreased matching contributions overall, which can lead to lower deferral rates for participants who are not automatically enrolled. READ MORE

By NAPA Net Staff2/15/2013 • 0 Comments

The latest installment in Milliman's “Insight” series, “Ten things your 401(k) wants you to know,” lays out some good, solid facts and simple advice about saving for retirement via a DC plan, like the importance of diversification and understanding plan fees, how compounding interest works, the impact of early distributions, and more. It even summarizes the possible impact of tax reform on DC plans. Written for the average investor, this is a nice, concise educational resource to pass on to plan participants. READ MORE

By NAPA Net Staff2/14/2013 • 2 Comments

401(k) plans don't work for low- and middle-income Americans, Jack Lew, President Obama’s nominee to replace Timothy Geithner as Treasury Secretary, said yesterday. Lew’s comment came in response to a question posed by Sen. Rob Portman (R-Ohio) about the tax incentive and effectiveness of 401(k) plans during a hearing of the Senate Finance Committee to consider Lew’s nomination. READ MORE

By NAPA Net Staff2/14/2013 • 0 Comments

In the second of three in-depth interviews with the finalists for the 2013 401(k) Advisor Leadership Award sponsored by NAPA and ASPPA, NAPA Net spoke with Jania Stout, CBFA®, AIF®, retirement plans practice leader for the Fiduciary Consulting Group, about her career, her business philosophy and the practices that have made her a finalist for this year’s award. One of the three finalists will receive the award at the 2013 NAPA/ASPPA 401(k) Summit, March 4 in Las Vegas. READ MORE

By NAPA Net Staff2/14/2013 • 0 Comments

While larger plans (1,000-plus participants) are using the fee disclosure regs to reduce costs and improve plan design, smaller plans are reluctant to make changes, according to insights from Towers Watson — even when their advisor recommends them — causing some to worry about their fiduciary liability. Smaller plans don’t have the staff or sophistication to make the changes, even if they could save money. READ MORE

By NAPA Net Staff2/13/2013 • 0 Comments

According to research conducted by Annova Consulting Group with mid-large plan sponsors ($20-$500 million) after a finals exercise in 2012, 31% decided to stay with their incumbent — up from 18% five years ago and 28% last year. Over the past five years, the percentage of plans that remain with their current record keepers has increased 10% each year. READ MORE

By NAPA Net Staff2/13/2013 • 1 Comments

Christopher Carosa of FiduciaryNews notes that two years ago, the SEC’s botched proposal for a uniform fiduciary standard was greeted with a uniform chorus of derision from both Congress and the brokerage industry. The biggest complaint was the alleged “cost” to investors should the SEC hold brokers to the same standard as it holds RIAs under the 1940 Investment Advisers Act. Carosa notes that a research study released last month may have finally supplied the much anticipated evidence of this cost — but with a surprising twist. READ MORE

By NAPA Net Staff2/12/2013 • 0 Comments

In the latest in a series of posts about the 2013 NAPA/ASPPA Summit, March 3-5, 2013 in Las Vegas, C. Todd Lacey, Senior Vice President, Transamerica Retirement Solutions, and co-chair of this year's conference, addresses the critically important task facing advisors: how to do a better job, as an industry and as a nation, to help prepare tomorrow’s retirees for the challenges they face. READ MORE

By NAPA Net Staff2/12/2013 • 0 Comments

Participants from three Fidelity DC plans have filed a lawsuit in the U.S. District Court in Boston alleging that Fidelity improperly used float income from interest bearing accounts earned from the time a participant requested disbursement to when it was actually disbursed. The plaintiffs alleged that the interest is part of plan assets and that Fidelity paid itself trust and record keeping fees beyond the authorized agreements. READ MORE

By NAPA Net Staff2/12/2013 • 0 Comments

Every advisor knows that the best way to prospect is through referrals and that the more good relationships you have, the more business opportunities you’re likely to get. But even if you have lots of clients and relationships, how do you leverage them? There are many books and coaches who give tips on asking for referrals, but can’t technology help? According to Relationship Science, a new company that was the subject of a recent New York Times piece, there may be a better way. READ MORE

By NAPA Net Staff2/12/2013 • 0 Comments

In the latest in a series of posts by speakers at the 2013 NAPA/ASPPA Summit, March 3-5, 2013 in Las Vegas, Joshua Dietch of Chatham Partners and Yaqub Ahmed of Franklin Templeton Investments share six conclusions from a year’s worth of interviews with plan sponsors about what retirement advisors did well and where they could improve in developing new business. READ MORE

By NAPA Net Staff2/11/2013 • 0 Comments

In the first of three in-depth interviews with the finalists for the 2013 401(k) Advisor Leadership Award sponsored by NAPA and ASPPA, NAPA Net spoke with Chad Larsen, PRP, AIF®, president of Moreton Retirement Partners in Denver, about his career, his business philosophy and the practices that have made him a finalist for this year’s award. One of the three finalists will receive the award at the 2013 NAPA/ASPPA 401(k) Summit, March 4 in Las Vegas. READ MORE

By NAPA Net Staff2/11/2013 • 0 Comments

Asset flows into TDFs showed no sign of slowing down in the fourth quarter of last year, as AUM reached new highs of $485 billion — a 29% increase over the previous year — according to a report by Ibbotson Associates. The Big Three — T Rowe, Vanguard and Fidelity — held 69% of the pie, with others like John Hancock, Wells Fargo, American Funds and TIAA-CREF growing. Overall, 75% of TDFs showed positive flow. READ MORE

By NAPA Net Staff2/11/2013 • 0 Comments

Highlights of our coverage the week of Feb. 4 included analysis of the credit markets, participants outcomes, retirement income projections and the effects of fee disclosure; E*Trade's advertising assault on plan advisors; results of a survey on the digital divide; and previews of presentations and events at the upcoming 401(k) Summit in March. READ MORE

By NAPA Net Staff2/11/2013 • 0 Comments

What is liability driven investing (LDI) and why should you care? LDI is not a product but a process — one that can include investments selected by an advisor. It uses information readily available for each participant in the plan, which should determine how much risk they need to take based on their current income replacement ratio. That ratio is based on income, age, account balance and deferral rates. A group of advisors will learn more about LDI at the inaugural LDI Bootcamp, held in cooperation with Thunderbird University April 3-5 in Phoenix, and led by leading plan advisor Jim Pupillo. READ MORE

By NAPA Net Staff2/8/2013 • 1 Comments

Industry guru Fred Reish thinks a new rule requiring DC plan providers to provide participants with retirement income projections based on their current balances (currently under consideration at the DOL) would have a positive and significant impact on the industry, since participants would have a better idea of how close (or far away) they are to retirement security. With benchmarks that estimate how much income their account balance can replace and a gap analysis, participants may be more willing to take action. READ MORE

By NAPA Net Staff2/8/2013 • 6 Comments

Hate those E*Trade ads that imply a baby can make good investment decisions? Well, there’s a new group of ads by the on-line brokerage firm attacking financial advisors. The new E*Trade ads claim that advisors take advantage of the investing public. READ MORE

By NAPA Net Staff2/7/2013 • 1 Comments

At a Senate Health, Education, Labor, and Pensions (HELP) Committee hearing last week, “Pension Savings: Are Workers Saving Enough for Retirement?”, the tone and substance of the hearing were generally encouraging for advocates of the employer based retirement system. One witness, Brigitte Madrian, the Aetna Professor of Public Policy and Corporate Management at Harvard Kennedy School, put her finger on the main roadblock facing retirement income options. READ MORE

By NAPA Net Staff2/7/2013 • 0 Comments

Currently, about one-third of eligible employees don’t participate in the 401(k) plan their employer offers, according to the DOL. One proven solution, of course, is automatic enrollment. But while auto enrollment has become widespread in the last few years, there are still plan sponsors out there who are reluctant to add the feature to an existing plan. READ MORE

By NAPA Net Staff2/7/2013 • 0 Comments

John Hancock’s Retirement Plan Services (RPS) division enjoyed a 28% increase in sales last year and drove overall performance of the company, as Manulife reported 2012 sales and earnings. Driven by higher plan turnover and Hartford’s announced sale in 2012, RPS achieved record sales in the fourth quarter as well as the overall year. The mutual fund division grew assets by 24%, to $42 billion, while their lifestyle and TDF funds grew to $80 billion, an increase of 13% — making them the fourth largest provider in that category. READ MORE

By NAPA Net Staff2/7/2013 • 0 Comments

After experiencing two boom-and-bust cycles in the financial market, Millennials (that is, people in their 20s), have become more skeptical of financial advice and more conservative than older investors, especially Baby Boomers. According to a survey by Accenture involving 1,000 high-income, digital-savvy investors, Millennials are most determined to learn how to invest and pass along their wealth. READ MORE

By NAPA Net Staff2/7/2013 • 0 Comments

Do private workers envy their fellow Americans, especially public workers, because they have amassed rich pensions? As reported last year during the election, there’s a growing divide between people who have a pension and those who don’t — a divide that may turn out to be more significant than differences in income. READ MORE

By NAPA Net Staff2/7/2013 • 0 Comments

The media is a powerful tool for increasing the scope of your business. Getting your name in print gives you immediate exposure to people who read the publication, but it also gives you the chance to reprint the article and send it to current clients and referral sources as well as potential clients and referral sources. Barbara Lewis offers a taste of her presentation at the upcoming NAPA/ASPPA 401(k) Summit, March 3-5 in Las Vegas. READ MORE

By NAPA Net Staff2/6/2013 • 0 Comments

While some people, especially in the financial services industry, are enjoying low or almost zero interest credit fueled by the Fed, PIMCO’s Bill Gross warns that when the music stops — which could be soon — the party will end. For an example, look at Japan, Gross says — but there are options for investors who recognize this trend and prepare. READ MORE

By NAPA Net Staff2/6/2013 • 0 Comments

For households of Americans age 55 and older, LIMRA projects that investible retirement assets will nearly double by 2020, rising to $22 trillion from the estimated $12 trillion in 2010. The projection is based on estimates from U.S. Census Bureau data. One implication, according to LIMRA: two-thirds, or nearly $15 trillion, will be looking for retirement income products. READ MORE

By NAPA Net Staff2/5/2013 • 0 Comments

Though fee disclosure may seem like yet another raft of paper that will be mostly ignored by plan sponsors and participants, media coverage and plaintiffs’ attorneys will keep the issue front and center, especially for participants. In the automotive and tobacco industries, for example, change was brought about by legal actions after stricter regulations were put into place. In general, those legal actions were initiated by lack of transparency and communication. Similarly, communication, trust and transparency about 401(k) services will be the keys to navigating the choppy waters of 401(k) fee disclosure. READ MORE

By NAPA Net Staff2/5/2013 • 0 Comments

On a monthly basis, EBRI produces estimates of the cumulative changes in 401(k) account balances — as a result of both contributions and investment returns — for several combinations of participant age and tenure. For individuals in the EBRI database during January, the average account balance rose 5.1% for participants ages 25 to 34 with one to four years of tenure. READ MORE

By NAPA Net Staff2/5/2013 • 0 Comments

Plan participants learn in different ways, so one-size-fits-all education programs are less likely to work. According to research with over 6,000 participants, OneAmerica found that there’s a distinct digital divide on how they want to learn and interact with their retirement plans. READ MORE

By NAPA Net Staff2/4/2013 • 0 Comments

The recent Wall Street Journal article reporting that a surprisingly high percentage of Americans are likely to delay retirement is causing a real buzz and highlighting the problem that almost everyone in the retirement industry knows: Most people are not saving enough to retire comfortably. READ MORE

By NAPA Net Staff2/4/2013 • 0 Comments

The demise of equity mutual funds is greatly exaggerated if January 2013 is any indication — equity funds accounted for $51 billion of the estimated $90 billion net inflows to stock and bond funds, excluding ETFs. According to Strategic Insight, which used research from ICI and proprietary surveys with distributors and fund managers, the $90 billion in inflows was significantly greater than the last record set in January 2004, which saw $58 billion of net inflows. READ MORE

By NAPA Net Staff2/4/2013 • 0 Comments

A busy week included coverage of surveys confirming that employees are planning to work longer to keep their health insurance, data indicating that plan participants are not exactly flocking to convert to Roth accounts, the emergence of private equity firms as a 401(k) investment option, commentary on the usefulness of Morningstar's star ratings, predictions for RIA M&A activity in 2013, and more. READ MORE

By NAPA Net Staff2/1/2013 • 0 Comments

According to a recent survey by EBRI and Mathew Greenwald & Associates, more people are expected to delay retirement just to continue to receive employer-sponsored health insurance. In 2003, 15% said they would retire earlier if they had access to health insurance, but that percentage almost doubled to 27% in 2012. READ MORE

By NAPA Net Staff2/1/2013 • 0 Comments

ASPPA and NAPA have announced the three finalists in the running for the 2013 401(k) Advisor Leadership Award. One of the three will receive the award during the 2013 NAPA/ASPPA 401(k) SUMMIT, March 4 in Las Vegas. READ MORE

By NAPA Net Staff2/1/2013 • 0 Comments

What do Congress and federal regulators have in store for the retirement industry in 2013? According to Aon Hewitt, although health care will get the most attention on the benefits front, retirement issues will get their fair share of attention from federal regulators this year. READ MORE

By NAPA Net Staff2/1/2013 • 0 Comments

The top 10 most-read stories on NAPA Net last month reflect concern over the fiscal cliff, fee disclosure and plan advisors' best practices. READ MORE

Marcy Supovitz

Marcy Supovitz

By Marcy Supovitz2/14/2013 • 0 Comments

Barely past our first birthday, NAPA continues to grow at a remarkable pace. For example, 19 new (or pending) Firm Partners have joined the fold since the holidays. Additionally, more than 90% of our 2012 Firm Partners have renewed their membership this year. And there’s more good news: It looks like attendance at this year’s NAPA/ASPPA 401(k) Summit, coming up March 3-5 in Las Vegas, will be the highest ever. Registrations are running ahead of last year’s pace, and there’s still time to register if you haven’t done so yet — but not much. READ MORE