Nevin's Data "Points"

Last week Fidelity Investments put out the results of a “survey” about people’s attitudes toward saving and retirement (see One Third of Workers Delaying Retirement ). The headline – basically that a third of respondents were putting off retirement – was no big surprise. It is perhaps a sign of the times that people, particularly those nearing retirement, now speak with disarming regularity about their intention to stay in the workforce beyond the ages typically associated with “retiring.” Certainly, a growing number of us (including those on both sides of this newsletter) toil at professions that can, from a physical standpoint anyway, be pursued just as well at 70 or 75 as they can at 55 (whether we will be permitted to do so is another subject altogether). Nor were the reasons for pushing back retirement earth-shattering; more than half (55%) said it was because they hadn’t saved enough, while roughly a third said they were planning to do so to maintain their employer-sponsored h...

I’ve always had a certain ambivalence about what are generally termed “Hallmark holidays.” You know the ones I’m talking about – the ones that seem crafted for the sole purpose of generating sales for greeting card sellers. Of course, after a while you no longer question their existence – and if one still struggles to remember exactly when “Grandparent’s Day” is, well, we’ve pretty much got Mother’s Day, Father’s Day, and Valentine’s Day down to a science. Regardless, I’ve never really been comfortable with ones like Secretary’s Day (now Administrative Professionals Day) and Bosses’ Day. I remember once, years ago, when I was part of a large department that had many “admins,” all with overlapping coverage responsibilities. The fact was, none of them could remotely have been considered to be anything like a “secretary” to me, or any one manager in particular. To me, they were simply part of the team that, like the rest of us, had a job to do, and did it. That didn’t mean we could ...

We all know that one of the hardest decisions for most plan participants is choosing how to invest their retirement savings. These days a widely touted solution is the asset allocation fund, or the lifestyle fund (I’ll use the terms interchangeably here, but there are differences) - an option that allows a participant to make a single investment choice: a fund pre-mixed to match an asset allocation deemed appropriate for a particular risk tolerance and/or retirement date. Not only have these options increasingly been promoted to participants – they have also become the solution du jour as a default fund choice for plan sponsors, particularly when combined with automatic enrollment. What hasn’t garnered the same level of attention is a potential irony regarding these funds. These very same funds that purport to make investment choices so much easier for participants, might actually present plan sponsors (and thus advisors) with a more difficult decision, IMHO. Consider that in choos...

The headlines of late have nearly all been about the impact on pension plan funding, but legislation affecting investment advice has also managed to piggyback its way back into two of the most recent bills – one sponsored by Congressman John Boehner (R-Ohio), who chairs the House Education and the Workforce Committee, and the other crafted by Senator Max Baucus (D-North Dakota) and Senator Chuck Grassley (R-Iowa), who heads the Senate Finance Committee. Both have cleared their respective committees, and while their future is not yet certain – both are dominated by complicated funding considerations for defined benefit pension plans, and neither is exactly in sync with reforms already put forth by the Bush Administration – it is interesting (IMHO) that both contain provisions regarding investment advice. For years I have watched providers struggle to offer only education and not advice, watched employers try desperately not to take on additional fiduciary responsibilities, and witnesse...