Nevin's Data "Points"

Last week the Congress was voting on an issue on which I have a strong opinion, and, while I did not vote for my congressman—and will likely never vote for him (unless, of course, he undergoes some kind of philosophical transformation)—I e-mailed him to express my opinion. And then I called his office to express the same opinion (not only because I feel so strongly about the issue, but because in a day of templated e-mail solicitations, I understand that a phone call probably has a greater impact). As I hung up the phone, my daughter, who was sitting in the room with me at the time, looked at me quizzically—so I explained to her what I had done, and the issue about which I had called. “Really?” she said—with an air of awe and wonder. And then, after a pause she said, “So, does that work?” I’ve given a lot of thought to that question since then. Of course, we live in a Republic, not a Democracy, and for the very most part, we don’t get to vote on all the individual issues brought be

It’s now been nearly three weeks since our Plan Designs conference in Chicago and, once again, I got so many interesting ideas, so much good information—well, I’m still making notes from my notes. For those who weren’t able to participate this year, here’s a sampling—and here’s hoping you will be able to join us in 2010! Participants who are automatically enrolled are even more inert than those who took the time to fill out the form. 92% of participants defaulted in at a 6% deferral do nothing. 4% actually increase that deferral rate. The Obama Administration does not want to mandate a government retirement solution—but it might provide one. Concerns about cost and control that target-date fund managers wield are generating a new interest in customized solutions. The key to successful retirement savings is not how you invest, but how much you save. Even if a plan has a plan adviser that is a fiduciary, the plan sponsor is still a fiduciary. Most plans don’t comply with ERISA 404(c).

Way before we had “reality” shows where we could watch people make fools of themselves in prime time, there was “Let’s Make a Deal.” The concept was simple – get contestants to show up in odd costumes, and give them a chance to trade in something (of no value) that they brought with them for something of undetermined value that was hidden in a box, or behind a curtain. That first trade was easy – where things got more interesting was once the contestant had obtained something of value – and was then given a chance to trade it for something that might be of higher value – or not. Sometimes it worked out – and, of course – sometimes the contestant got “zonked.” IMHO, there’s something of that going on in the current debate over workplace benefits. I think you’d be hard-pressed to find anyone who doesn’t think that Americans should have access to basic needs such as health care, or a secure (if not comfortable) retirement. Certainly we’re all striving to help ensure the latter, and w

We hadn’t gotten very far into the agenda of our Plan Designs conference last week when a plan sponsor asked the question that, IMHO, is on a lot of people’s minds these days. And while I don’t remember her exact words, the essence was this: “What can you say to participants who no longer trust their 401(k)?” As we explored the question, we learned that her firm matched dollar-for-dollar up to 5%—a VERY generous match (particularly these days)—and yet, despite that, she said she has participants who are dropping out of the 401(k)—and/or talking about dropping out of the 401(k)—with an eye toward simply investing in a bank CD (not the music kind). Now, before you ask, yes, her plan uses a financial adviser—and, yes, that financial adviser and her provider, and, so far as I could tell, she had worked hard to communicate all the “proper” messages. Her plan participants had been reminded about market cycles, reassured about the ability to get a “bargain” with their new contributions, co